Omnicom Group Inc. Declares Dividend

NEW YORK, Dec. 2, 2021 — The Board of Directors of Omnicom Group Inc. (NYSE: OMC) declared a quarterly dividend of 70 cents per outstanding share of the corporation’s common stock. The dividend is payable on January 11, 2022 to Omnicom Group common shareholders of record at the close of business on December 21, 2021.

About Omnicom Group Inc.
Omnicom Group (www.omnicomgroup.com) is a leading global marketing and corporate communications company. Omnicom’s branded networks and numerous specialty firms provide advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations and other specialty communications services to over 5,000 clients in more than 70 countries. Follow us on Twitter for the latest news.

Omnicom Prices £325 Million Senior Notes Offering

NEW YORK, Nov. 17, 2021 — Omnicom Group Inc. (NYSE: OMC) and Omnicom Capital Holdings plc (the “Issuer”), a wholly owned subsidiary of Omnicom Group Inc. (“Omnicom Group”), today announced the pricing of the Issuer’s public offering of £325 million aggregate principal amount of 2.250% Senior Notes due 2033 (the “Notes”). The Notes will mature on November 22, 2033. The transaction is expected to close on November 22, 2021, subject to customary closing conditions.

The Notes will bear interest at a rate of 2.250 percent per annum. The Notes will be fully and unconditionally guaranteed by Omnicom Group. The Notes and the related guarantee will be the unsecured and unsubordinated obligations of the Issuer and Omnicom Group, respectively, and will rank equal in right of payment to all of their respective existing and future unsecured senior indebtedness.

The Issuer intends to use the net proceeds from the offering for general corporate purposes, which could include working capital expenditures, fixed asset expenditures, acquisitions, repayment of commercial paper and short-term debt, refinancing of other debt, repurchases of Omnicom Group’s common stock or other capital transactions.

Application will be made to have the Notes listed on The New York Stock Exchange. The listing application will be subject to approval by The New York Stock Exchange. If such a listing is obtained, the Issuer will have no obligation to maintain such listing, and the Issuer may delist the Notes at any time.

BNP Paribas, Deutsche Bank AG, London Branch, and J.P. Morgan Securities plc are acting as joint book-running managers for the offering.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make an offer, solicitation or sale in such jurisdiction. The public offering is being made pursuant to an effective shelf registration statement that has been filed with the Securities and Exchange Commission (“SEC”). A final prospectus supplement related to the offering will be filed with the SEC and will be available on the SEC’s website at http://www.sec.gov. In addition, copies of the prospectus and prospectus supplement relating to the Notes offered in the offering may be obtained by contacting any of the following underwriters: BNP Paribas toll-free at 1-800-854-5674, Deutsche Bank toll-free at 1-800-503-4611, or J.P. Morgan Securities plc collect at +44-207-134-2468.

This document is for distribution only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc.”) of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This document is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons. Relevant stabilization regulations including FCA/ICMA will apply. UK MiFIR and MiFID II professionals / ECPs-only / No UK or EEA PRIIPs KID – Manufacturer target market (MIFID II and UK MiFIR product governance) is eligible counterparties and professional clients only (all distribution channels). No EEA or UK PRIIPs key information document (KID) has been prepared as not available to retail in EEA or UK.

About Omnicom Group Inc.

Omnicom Group Inc. (NYSE: OMC) (www.omnicomgroup.com) is a leading global marketing and corporate communications company. Omnicom’s branded networks and numerous specialty firms provide advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations and other specialty communications services to over 5,000 clients in more than 70 countries. Follow us on Twitter for the latest news.

Forward-Looking Statements

Certain statements in this press release constitute forward-looking statements, including statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, from time to time, we or our representatives have made, or may make, forward-looking statements, orally or in writing. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of our management as well as assumptions made by, and information currently available to, our management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “should,” “would,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or similar words, phrases or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside our control. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include: the impact of the COVID-19 pandemic, international, national or local economic conditions that could adversely affect us or our clients; losses on media purchases and production costs incurred on behalf of clients; reductions in client spending, a slowdown in client payments and a deterioration in the credit markets; the ability to attract new clients and retain existing clients in the manner anticipated; changes in client advertising, marketing and corporate communications requirements; failure to manage potential conflicts of interest between or among clients; unanticipated changes relating to competitive factors in the advertising, marketing and corporate communications industries; the ability to hire and retain key personnel; currency exchange rate fluctuations; reliance on information technology systems; changes in legislation or governmental regulations affecting us or our clients; risks associated with assumptions we make in connection with our critical accounting estimates and legal proceedings; and our international operations, which are subject to the risks of currency repatriation restrictions, social or political conditions and regulatory actions. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that may affect our business, including those described in Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Omnicom Group’s Annual Report on Form 10-K for the year ended December 31, 2020. Except as required under applicable law, we do not assume any obligation to update these forward-looking statements.

Omnicom at Advertising Week 2021

Advertising Week 2021, or AWNewYork, will return as a hybrid event this year, gathering professionals in New York and digitally around the globe for four days of insight, inspiration and rejuvenation. The week will focus on brilliant creative work, technology advances, consumer research and media transformation happening right now. Omnicom, along with several agency members from across the networks, will be featured in speaking sessions throughout the week. 

Highlights include:

Monday, October 18th

3:00PM | “The World is Ending and It’s Never Been a Better Time to Be in Advertising” with Ari Weiss, Global Chief Creative Officer, DDB

Tuesday, October 19th  

12:30PM | “Consumer Attention: A Sacred Commodity” with Christina Hanson, Chief Strategy Officer, OMD WW

Wednesday, October 20th  

12:00PM | “Hey, We Could All Use A Laugh” with Chris Beresford-Hill, CCO, TBWA\Chiat\Day New York

Thursday, October 21st

2:00PM | “Brand On-Demand: Reimagining Collaborative Content” withTreva Thimm, Managing Director, Head of Content, Omnicom Media Group, Content Collective

View the full list of events here.

Omnicom Group Reports Second Quarter and Year-to-Date 2021 Results

NEW YORK, July 20, 2021 — Omnicom Group Inc. (NYSE: OMC) today announced net income – Omnicom Group Inc. for the second quarter of 2021 of $348.2 million as compared to a net loss – Omnicom Group Inc. of $24.2 million in the second quarter of 2020. Diluted net income per share for the second quarter of 2021 was $1.60 per share compared to a diluted net loss per share of $0.11 in the second quarter of 2020. Net income – Omnicom Group Inc. and diluted net income per share for the second quarter of 2021 include the gain on a disposition of a subsidiary and a loss on the early retirement of our 2022 Senior Notes, of $31.0 million and $0.14 per share, respectively, as discussed below.

Net loss – Omnicom Group Inc. and diluted net loss per share – Omnicom Group Inc. in the second quarter of 2020 included a net after-tax decrease of $223.1 million and $1.03 per share, respectively, as a result of COVID-19 repositioning costs.

Omnicom’s worldwide revenue in the second quarter of 2021, which continued to improve from the negative effects of the COVID-19 pandemic, increased 27.5% to $3,571.6 million from $2,800.7 million in the second quarter of 2020. The components of the change in revenue included an increase in revenue from the positive impact of foreign currency translation of 5.4%, a decrease in acquisition revenue, net of disposition revenue of 2.2% and an increase in revenue from organic growth of 24.4%. Since the onset of the COVID-19 pandemic, the second quarter of 2020 had the most significant negative impact on our revenue.  

Organic growth in the second quarter of 2021 as compared to the second quarter of 2020 increased across all of our fundamental disciplines. The percentage increases were as follows: 29.8% for Advertising, 25.0% for CRM Precision Marketing, 15.2% for CRM Commerce and Brand Consulting, 53.0% for CRM Experiential, 22.7% for CRM Execution & Support, 15.1% for Public Relations and 4.5% for Healthcare.

Across all of our regional markets, organic growth in the second quarter of 2021 as compared to the second quarter of 2020 was as follows: 19.9% for the United States, 37.1% for Other North America, 23.8% for the United Kingdom, 34.5% for the Euro Markets & Other Europe, 27.9% for Asia Pacific, 20.8% for Latin America and 42.8% for the Middle East & Africa.

Operating profit increased $505.9 million to $568.4 million compared to $62.5 million during the second quarter of 2020.  Our operating margin for the second quarter of 2021 increased to 15.9% versus 2.2% for the second quarter of 2020.

Operating profit in the second quarter of 2021 reflects a pre-tax increase of $50.5 million arising from the gain on disposition of ICON, a specialty media business, during the quarter. The sale of ICON is part of our continuing realignment of our portfolio of businesses and is consistent with our strategic plan and investment priorities. The disposition is not expected to have a material impact on our ongoing results of operations or financial position.

Operating profit in the second quarter of 2020 included a pre-tax decrease of $277.9 million due to COVID-19 repositioning costs, comprised of incremental severance charges, right-of-use asset impairments and other costs.

Interest expense in the second quarter of 2021 increased $26.6 million due to the early retirement of our 2022 Senior Notes.  The retirement reduced our leverage, which had increased from the issuance of $600 million of Senior Notes due 2030 in the second quarter of 2020 to increase our liquidity in response to the pandemic.  

For the second quarter of 2021, our effective income tax rate decreased period-over-period to 24.9%. The lower rate for the second quarter of 2021 was predominantly the result of a nominal tax applied against the book gain on the disposal of ICON that resulted from excess tax over book basis. Additionally, the prior year effective tax rate reflects the non-deductibility in certain jurisdictions of a portion of the COVID-19 repositioning charges recorded in the second quarter of 2020, which increased our rate.

Year-to-Date

Net income – Omnicom Group Inc. for the six months ended June 30, 2021 increased $402.0 million to $636.0 million compared to $234.0 million in the same period in 2020.  Diluted net income per share – Omnicom Group Inc. for the six months ended June 30, 2021 increased $1.85 to $2.93 per share compared to $1.08 per share for the six months ended June 30, 2020. Net income – Omnicom Group Inc. and diluted net income per share for the six months ended June 30, 2021 include the gain on a disposition of a subsidiary and a loss on the early retirement of our 2022 Senior Notes, of $31.0 million and $0.14 per share, respectively, as discussed below.

Net income – Omnicom Group Inc. and diluted net income per share – Omnicom Group Inc. for the six months ended June 30, 2020 included a net after-tax decrease of $223.1 million and $1.03 per share, respectively, as a result of COVID-19 repositioning costs incurred during the second quarter of 2020, as previously discussed above.

Omnicom’s worldwide revenue for the six months ended June 30, 2021 increased 12.7% to $6,998.6 million from $6,207.6 million in the same period of 2020.  The components of the change in revenue included an increase in revenue from the positive impact of foreign currency translation of 4.0%, a decrease in acquisition revenue, net of disposition revenue of 1.2% and an increase in revenue from organic growth of 10.0% when compared to the same period of 2020.

Organic growth for the six months ended June 30, 2021 compared to the same period in 2020 in our fundamental disciplines was as follows: Advertising increased 13.9%, CRM Precision Marketing increased 15.8%, CRM Commerce and Brand Consulting increased 4.7%, CRM Experiential decreased 1.0%, CRM Execution & Support increased 1.6%, Public Relations increased 5.3% and Healthcare increased 2.3%.

Across all of our regional markets, organic growth in the six months ended June 30, 2021 as compared to the same period of 2020 was as follows: 8.5% for the United States, 14.0% for Other North America, 6.7% for the United Kingdom, 13.5% for the Euro Markets & Other Europe, 14.4% for Asia Pacific, 7.7% for Latin America and 10.1% for the Middle East & Africa.

Operating profit increased $551.1 million, or 114.2%, to $1,033.8 million from $482.7 million for the six months ended June 30, 2020. Our operating margin for the six months ended June 30, 2021 increased to 14.8% versus 7.8% for the same period of 2020. 

Operating profit for the six months ended June 30, 2021 reflects a pre-tax increase of $50.5 million arising from the gain on disposition of ICON during the second quarter of 2021.

Operating profit for the six months ended June 30, 2020 included a pre-tax decrease of $277.9 million due to COVID-19 repositioning costs, as discussed previously. 

Interest expense for the six months ended June 30, 2021 increased $26.6 million due to the early retirement of our 2022 Senior Notes, as discussed previously.

Our effective tax rate for the six months ended June 30, 2021 decreased period-over-period to 25.8% from 30.6%. In connection with the sale of ICON in 2021, we recorded a gain of $50.5 million. The lower rate for 2021 was predominantly the result of a nominal tax applied against the book gain on the disposal of ICON that resulted from excess tax over book basis. Additionally, the prior year effective tax rate reflects the non-deductibility in certain jurisdictions of a portion of the COVID-19 repositioning charges recorded in the second quarter of 2020, which increased our rate. Our effective tax rate for the six months ended June 30, 2021 would have been in line with our expectations except for the nominal tax on the pre-tax ICON gain of $50.5 million.

Non-GAAP Financial Measures

We use certain non-GAAP financial measures in describing our performance. We use EBITA (defined as earnings before interest, taxes and amortization of intangible assets) and EBITA Margin (defined as EBITA divided by revenue) as additional operating performance measures, which exclude the non-cash amortization expense of intangible assets (primarily consisting of amortization of intangible assets arising from acquisitions). Accordingly, we believe EBITA and EBITA Margin are useful measures for investors to evaluate the performance of our business.

For the second quarter of 2021, EBITA increased $505.7 million, or 602.7%, to $589.6 million from $83.9 million in the second quarter of 2020.  Our EBITA margin increased to 16.5% for the second quarter of 2021 versus 3.0% in the second quarter of 2020.

For the six months ended June 30, 2021, EBITA increased 104.8%, or $550.0 million, to $1,074.9 million from $524.9 million for the same period in 2020. Our EBITA margin increased to 15.4% for the six months ended June 30, 2021 versus 8.5% when compared to the six months ended June 30, 2020.

EBITA for the second quarter and six months ended June 30, 2021 reflects a pre-tax increase of $50.5 million arising from the gain on disposition of ICON.  EBITA for the second quarter and six months ended June 30, 2020 reflects a pre-tax decrease of $277.9 million due to COVID-19 repositioning costs, comprised of incremental severance charges, right-of-use asset impairments and other costs.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP. Non-GAAP financial measures reported by us may not be comparable to similarly titled amounts reported by other companies.

COVID-19 Business Update

We experienced an improvement in our business in the second quarter of 2021 as compared to the second quarter of 2020, primarily because the recovery from the COVID-19 pandemic that began in the first quarter 2021 continued into the second quarter. The second quarter of 2020 reflected the most negative impact on our businesses since the onset of the pandemic. The COVID-19 pandemic did not significantly impact our major markets and businesses until late in the first quarter of 2020 and the improvement from the pandemic in 2021 compared to the prior year, was significantly greater in the second quarter.

Global economic conditions will continue to be volatile as long as the COVID-19 pandemic remains a public health threat, including as a result of new information concerning the severity of the pandemic, government actions to mitigate the effects of the pandemic in the near-term, and the resulting impact on our clients’ spending plans. We expect global economic performance and the performance of our businesses to vary by geography and discipline until the impact of the COVID-19 pandemic on the global economy subsides.

Definitions – Components of Revenue Change

We use certain terms in describing the components of the change in revenue above.

Foreign exchange rate impact: calculated by translating the current period’s local currency revenue using the prior period average exchange rates to derive current period constant currency revenue. The foreign exchange rate impact is the difference between the current period revenue in U.S. Dollars and the current period constant currency revenue.

Acquisition revenue, net of disposition revenue: Acquisition revenue is calculated as if the acquisition occurred twelve months prior to the acquisition date by aggregating the comparable prior period revenue of acquisitions through the acquisition date. As a result, acquisition revenue excludes the positive or negative difference between our current period revenue subsequent to the acquisition date and the comparable prior period revenue and the positive or negative growth after the acquisition date is attributed to organic growth. Disposition revenue is calculated as if the disposition occurred twelve months prior to the disposition date by aggregating the comparable prior period revenue of disposals through the disposition date. The acquisition revenue and disposition revenue amounts are netted in the description above.

Organic growth: calculated by subtracting the foreign exchange rate impact component and the acquisition revenue, net of disposition revenue component from total revenue growth.

Revenue by Discipline

Effective January 1, 2021, we realigned the classification of certain services primarily within our CRM Consumer Experience discipline. As a result, our CRM discipline is now grouped into four categories: CRM Precision Marketing which includes our precision marketing and digital/direct marketing agencies; CRM Commerce and Brand Consulting that is primarily comprised of Omnicom Commerce Group, including our shopper marketing businesses, and Omnicom Brand Consulting agencies; CRM Experiential, which includes our experiential marketing agencies and events businesses; and CRM Execution & Support, which includes field marketing, merchandising and point of sale, as well as other specialized marketing and custom communications services.

Forward-looking Statements

Certain statements in this press release including those related to COVID-19 constitute forward-looking statements, including statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, based on current beliefs of the Company’s management as well as assumptions made by, and information currently available to, the Company’s management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “should,” “would,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or similar words, phrases or expressions.

Forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control. Therefore, you should not place undue reliance on such statements. You should carefully consider this and the other risks and uncertainties that may affect the Company’s business, including those described in Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements.

Conference Call

Omnicom will host a conference call to review the second quarter 2021 financial results on Tuesday, July 20, 2021 at 8:30 a.m. EDT. Participants can listen to the conference call by dialing (844) 291-6362 (domestic) or (234) 720-6995 (international), along with access code 1468163. The call will also be simulcast and archived on our website at: https://investor.omnicomgroup.com/investor-relations/news-events-and-filings.

About Omnicom Group Inc.

Omnicom Group Inc. (NYSE: OMC) (www.omnicomgroup.com) is a leading global marketing and corporate communications company.  Omnicom’s branded networks and numerous specialty firms provide advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations and other specialty communications services to over 5,000 clients in more than 70 countries.  Follow us on Twitter for the latest news.

Omnicom Group Inc.

Consolidated Statements of Income

Three Months Ended June 30

(Unaudited)

(Dollars in Millions, Except Per Share Data)

2021(a) 2020(b)(c)
Revenue $3,571.6 $2,800.7
Operating Expenses:
Salary and service costs $2,603.1 $ 2,031.1
Occupancy and other costs 293.9 290.0
Gain on disposition of subsidiary (50.5)
COVID-19 repositioning costs 277.9
Costs of services 2,846.5 2,599.0
Selling, general and administrative expenses 103.2 82.1
Depreciation and amortization 53.5 57.1
3,003.2 2,738.2
Operating Profit 568.4 62.5
Interest Expense 80.3 53.7
Interest Income 6.8 6.5
Income Before Income Taxes 494.9 15.3
Income Tax Expense 123.2 21.9
Loss From Equity Method Investments (0.1) (7.8)
Net Income (Loss) 371.6 (14.4)
Net Income Attributed To Noncontrolling Interests 23.4 9.8
Net Income (Loss) – Omnicom Group Inc. $348.2 $(24.2)
Net Income (Loss) Per Share – Omnicom Group Inc.
Basic $1.62 $(0.11)
Diluted $1.60 $(0.11)
Weighted average shares (in millions)
Basic 215.4 214.9
Diluted 217.1 215.4
Dividends Declared Per Common Share $0.70 $0.65
(a)During the second quarter of 2021, we recorded a gain on the disposition of subsidiaries, which increased Operating Profit and Net Income – Omnicom Group Inc. by $50.5 million for the three months ended June 30, 2021. Additionally, Net Interest Expense during the second quarter of 2021 included a $26.6 million charge related to the early extinguishment of our 2022 Senior Notes, which decreased Net Income – Omnicom Group Inc. by $19.5 million for the three months ended June 30, 2021. The net impact of these items increased Earnings per Share – Diluted by $0.14 per share for the three months ended June 30, 2021.
(b)During the second quarter of 2020, we recorded expenses for certain repositioning actions related to the realignment of our businesses in reaction to the COVID-19 pandemic. The impact of these items decreased Operating Profit by $277.9 million, Net Income – Omnicom Group Inc. by $223.1 million and Earnings per Share – Diluted by $1.03 per share for the three months ended June 30, 2020.
(c)Salary and service costs for the second quarter of 2020 includes the reduction of $49.2 million in operating expenses related to reimbursements and tax credits under government programs in several countries where we have operations.

Omnicom Group Inc.

Consolidated Statements of Income

Six Months Ended June 30

(Unaudited)

(Dollars in Millions, Except Per Share Data)

2021(a) 2020(b)(c)
Revenue $6,998.6 $6,207.6
Operating Expenses:
Salary and service costs $5,148.1 $ 4,564.4
Occupancy and other costs 585.5 599.6
Gain on disposition of subsidiary (50.5)
COVID-19 repositioning costs 277.9
Costs of services 5,683.1 5,441.9
Selling, general and administrative expenses 174.9 168.9
Depreciation and amortization 106.8 114.1
5,964.8 5,724.9
Operating Profit 1,033.8 482.7
Interest Expense 134.1 112.2
Interest Income 13.1 19.2
Income Before Income Taxes 912.8 389.7
Income Tax Expense 235.2 119.3
Loss From Equity Method Investments (0.1) (13.0)
Net Income 677.5 257.4
Net Income Attributed To Noncontrolling Interests 41.5 23.4
Net Income – Omnicom Group Inc. $636.0 $234.0
Net Income Per Share – Omnicom Group Inc.
Basic $2.95 $1.08
Diluted $2.93 $1.08
Weighted average shares (in millions)
Basic 215.5 215.8
Diluted 217.0 216.5
Dividends Declared Per Common Share $1.40 $1.30
(a)During the second quarter of 2021, we recorded a gain on the disposition of subsidiaries, which increased Operating Profit and Net Income – Omnicom Group Inc. by $50.5 million for the six months ended June 30, 2021. Additionally, Net Interest Expense during the second quarter of 2021 included a $26.6 million charge related to the early extinguishment of our 2022 Senior Notes, which decreased Net Income – Omnicom Group Inc. by $19.5 million for the six months ended June 30, 2021. The net impact of these items increased Earnings per Share – Diluted by $0.14 per share for the six months ended June 30, 2021.
(b)During the second quarter of 2020, we recorded expenses for certain repositioning actions related to the realignment of our businesses in reaction to the COVID-19 pandemic. The impact of these items decreased Operating Profit by $277.9 million, Net Income – Omnicom Group Inc. by $223.1 million and Earnings per Share – Diluted by $1.03 per share for the six months ended June 30, 2020.
(c)Salary and service costs for the six months ended June 30, 2020 includes the reduction of $49.2 million in operating expenses related to reimbursements and tax credits under government programs in several countries where we have operations.

Omnicom Group Inc.

Detail of Operating Expenses

Three Months Ended June 30

(Unaudited)

(Dollars in Millions)

2021 2020
Operating Expenses:
Salary and service costs
Salary and related service costs $1,721.7 $1,424.7
Third-party service costs 881.4 606.4
Occupancy and other costs 293.9 290.0
Gain on disposition of subsidiary (50.5)
COVID-19 repositioning costs 277.9
Costs of services 2,846.5 2,599.0
Selling, general and administrative expenses 103.2 82.1
Depreciation and amortization 53.5 57.1
Total Operating Expenses $3,003.2 $2,738.2

Omnicom Group Inc.

Detail of Operating Expenses

Six Months Ended June 30

(Unaudited)

(Dollars in Millions)

2021 2020
Operating Expenses:
Salary and service costs
Salary and related service costs $3,370.9 $3,067.1
Third-party service costs 1,777.2 1,497.3
Occupancy and other costs 585.5 599.6
Gain on disposition of subsidiary (50.5)
COVID-19 repositioning costs 277.9
Costs of services 5,683.1 5,441.9
Selling, general and administrative expenses 174.9 168.9
Depreciation and amortization 106.8 114.1
Total Operating Expenses $5,964.8 $5,724.9

Omnicom Group Inc.

Reconciliation of Non-GAAP Financial Measures – EBITA

Three Months Ended June 30

(Unaudited)

(Dollars in Millions)

2021 2020
Net Income (Loss) – Omnicom Group Inc. $348.2 $(24.2)
Net Income Attributed To Noncontrolling Interests 23.4 9.8
Net Income (Loss) 371.6 (14.4)
Loss From Equity Method Investments (0.1) (7.8)
Income Tax Expense 123.2 21.9
Income Before Income Taxes 494.9 15.3
Interest Income 6.8 6.5
Interest Expense 80.3 53.7
Operating Profit 568.4 62.5
Add back: Amortization of intangible assets 21.2 21.4
Earnings before interest, taxes and amortization of intangible assets (“EBITA”) $589.6 $83.9
Revenue $3,571.6 $2,800.7
EBITA $589.6 $83.9
EBITA Margin % 16.5 % 3.0 %

The above table reconciles the U.S. GAAP financial measure of Net Income – Omnicom Group Inc. to EBITA (defined as earnings before interest, taxes and amortization of intangible assets) and EBITA Margin (defined as EBITA divided by revenue) for the periods presented. We use EBITA and EBITA Margin as additional operating performance measures, which exclude the non-cash amortization expense of intangible assets (primarily consisting of amortization of intangible assets arising from acquisitions). Accordingly, we believe EBITA and EBITA Margin are useful measures for investors to evaluate the performance of our business. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP. Non-GAAP financial measures reported by us may not be comparable to similarly titled amounts reported by other companies.

Omnicom Group Inc.

Reconciliation of Non-GAAP Financial Measures – EBITA

Six Months Ended June 30

(Unaudited)

(Dollars in Millions)

2021 2020
Net Income – Omnicom Group Inc. $636.0 $234.0
Net Income Attributed To Noncontrolling Interests 41.5 23.4
Net Income 677.5 257.4
Loss From Equity Method Investments (0.1) (13.0)
Income Tax Expense 235.2 119.3
Income Before Income Taxes 912.8 389.7
Interest Income 13.1 19.2
Interest Expense 134.1 112.2
Operating Profit 1,033.8 482.7
Add back: Amortization of intangible assets 41.1 42.2
Earnings before interest, taxes and amortization of intangible assets (“EBITA”) $1,074.9 $524.9
Revenue $6,998.6 $6,207.6
EBITA $1,074.9 $524.9
EBITA Margin % 15.4 % 8.5 %

The above table reconciles the U.S. GAAP financial measure of Net Income – Omnicom Group Inc. to EBITA (defined as earnings before interest, taxes and amortization of intangible assets) and EBITA Margin (defined as EBITA divided by revenue) for the periods presented. We use EBITA and EBITA Margin as additional operating performance measures, which exclude the non-cash amortization expense of intangible assets (primarily consisting of amortization of intangible assets arising from acquisitions). Accordingly, we believe EBITA and EBITA Margin are useful measures for investors to evaluate the performance of our business. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP. Non-GAAP financial measures reported by us may not be comparable to similarly titled amounts reported by other companies.

Omnicom Group Reports First Quarter 2021 Results

NEW YORK, April 20, 2021 — Omnicom Group Inc. (NYSE: OMC) today announced net income – Omnicom Group Inc. for the first quarter of 2021 of $287.8 million as compared to $258.1 million in the first quarter of 2020. Diluted net income per share for the first quarter of 2021 was $1.33 per share compared to $1.19 in the first quarter of 2020.

Omnicom’s worldwide revenue in the first quarter of 2021 increased 0.6% to $3,426.9 million from $3,406.9 million in the first quarter of 2020. The components of the change in revenue included an increase in revenue from the positive impact of foreign currency translation of 2.8%, a decrease in acquisition revenue, net of disposition revenue of 0.4% and a decrease in revenue from negative organic growth of 1.8%, primarily due to the negative effects on our revenue attributable to the COVID-19 pandemic, when compared to the first quarter of 2020.  

Organic growth in the first quarter of 2021 as compared to the first quarter of 2020 in our fundamental disciplines was as follows: Advertising increased 1.2%, CRM Precision Marketing increased 7.2%, CRM Commerce and Brand Consulting decreased 4.2%, CRM Experiential decreased 33.2%, CRM Execution & Support decreased 13.3%, Public Relations decreased 3.5% and Healthcare was flat.

Across all of our regional markets, organic growth in the first quarter of 2021 as compared to the first quarter of 2020 was as follows: the United States decreased 1.0%, Other North America decreased 3.2%, the United Kingdom decreased 6.4%, the Euro Markets & Other Europe decreased 3.2%, Asia Pacific increased 2.5%, Latin America decreased 2.4% and the Middle East & Africa decreased 10.2%.

Operating profit increased $45.2 million, or 10.8%, to $465.4 million compared to $420.2 million during the first quarter of 2020.  Our operating margin for the first quarter of 2021 increased to 13.6% versus 12.3% for the first quarter of 2020.

For the first quarter of 2021, our effective income tax rate increased period-over-period to 26.8% from 26.0%.

Non-GAAP Financial Measures

We use certain non-GAAP financial measures in describing our performance. We use EBITA (defined as earnings before interest, taxes and amortization of intangible assets) and EBITA margin (defined as EBITA divided by revenue) as additional operating performance measures, which exclude the non-cash amortization expense of intangible assets (primarily consisting of amortization of intangible assets arising from acquisitions). Accordingly, we believe EBITA and EBITA margin are useful measures for investors to evaluate the performance of our business.

For the first quarter of 2021, EBITA increased $44.3 million, or 10.0%, to $485.3 million from $441.0 million in the first quarter of 2020.  Our EBITA margin increased to 14.2% for the first quarter of 2021 versus 12.9% in the first quarter of 2020.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP. Non-GAAP financial measures reported by us may not be comparable to similarly titled amounts reported by other companies.

COVID-19 Business Update

The negative effects of the COVID-19 pandemic began to have a significant impact on our businesses late in the first quarter of 2020. In the beginning of 2021, we continued to experience the negative impact of the pandemic on our organic revenue compared to the same period in the prior year. However, the impact from the COVID-19 pandemic on the global economy appears to be moderating in several of our markets, and we expect to achieve positive organic revenue growth beginning in the second quarter of this year and for the full year 2021.

As long as the COVID-19 pandemic remains a public health threat, global economic conditions will continue to be volatile depending on several factors, including new information concerning the severity of the pandemic, government actions to mitigate the effects of the pandemic in the near-term, and the resulting impact on our clients’ spending plans. We expect global economic performance and the performance of our businesses to vary by geography and discipline until the impact of the COVID-19 pandemic on the global economy moderates. We continuously assess the impact of the COVID-19 pandemic and adjust our response related to changes in our business.

In the second quarter of 2020, we took steps to strengthen our liquidity and financial position that were intended to mitigate any potential impact of the COVID-19 pandemic on our liquidity. Among other things, we issued $600 million of 4.20% Senior Notes due 2030 and entered into a $400 million 364-day revolving credit facility, or 364 Day Credit Facility, and we suspended our share repurchase activity. The 364 Day Credit Facility expired without ever being drawn on April 2, 2021.

Definitions – Components of Revenue Change

We use certain terms in describing the components of the change in revenue above.

Foreign exchange rate impact: calculated by translating the current period’s local currency revenue using the prior period average exchange rates to derive current period constant currency revenue. The foreign exchange rate impact is the difference between the current period revenue in U.S. Dollars and the current period constant currency revenue.

Acquisition revenue, net of disposition revenue: Acquisition revenue is calculated as if the acquisition occurred twelve months prior to the acquisition date by aggregating the comparable prior period revenue of acquisitions through the acquisition date. As a result, acquisition revenue excludes the positive or negative difference between our current period revenue subsequent to the acquisition date and the comparable prior period revenue and the positive or negative growth after the acquisition date is attributed to organic growth. Disposition revenue is calculated as if the disposition occurred twelve months prior to the disposition date by aggregating the comparable prior period revenue of disposals through the disposition date. The acquisition revenue and disposition revenue amounts are netted in the description above.

Organic growth: calculated by subtracting the foreign exchange rate impact component and the acquisition revenue, net of disposition revenue component from total revenue growth.

Revenue by Discipline

Effective January 1, 2021, we realigned the classification of certain services primarily within our CRM Consumer Experience discipline. As a result, our CRM discipline is now grouped into four categories: CRM Precision Marketing which includes our precision marketing and digital/direct marketing agencies; CRM Commerce and Brand Consulting that is primarily comprised of Omnicom Commerce Group, including our shopper marketing businesses, and Omnicom Brand Consulting agencies; CRM Experiential, which includes our experiential marketing agencies and events businesses; and CRM Execution & Support, which includes field marketing, merchandising and point of sale, as well as other specialized marketing and custom communications services.

Forward-looking Statements

Certain statements in this press release related to the potential impact of the COVID-19 outbreak constitute forward-looking statements, including statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of the Company’s management as well as assumptions made by, and information currently available to, the Company’s management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “should,” “would,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or similar words, phrases or expressions.

Forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control. Therefore, you should not place undue reliance on such statements. You should carefully consider this and the other risks and uncertainties that may affect the Company’s business, including those described in Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements.

Conference Call

Omnicom will host a conference call to review the first quarter 2021 financial results on Tuesday, April 20, 2021 at 8:30 a.m. EDT. Participants can listen to the conference call by dialing (877) 336-4440 (domestic) or (409) 207-6984 (international), along with access code 5410296. The call will also be simulcast and archived on our website at: https://investor.omnicomgroup.com/investor-relations/news-events-and-filings.

About Omnicom Group Inc.

Omnicom Group Inc. (NYSE: OMC) (www.omnicomgroup.com) is a leading global marketing and corporate communications company.  Omnicom’s branded networks and numerous specialty firms provide advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations and other specialty communications services to over 5,000 clients in more than 70 countries.  Follow us on Twitter for the latest news.

Omnicom Group Inc.
Consolidated Statements of Income
Three Months Ended March 31
(Unaudited)
(Dollars in Millions, Except Per Share Data)
2021 2020
Revenue $ 3,426.9   $ 3,406.9
Operating Expenses:
Salary and service costs 2,545.0 2,533.3
Occupancy and other costs 291.6 309.6
Costs of services 2,836.6 2,842.9
Selling, general and administrative expenses 71.6 86.8
Depreciation and amortization 53.3 57.0
2,961.5 2,986.7
Operating Profit 465.4 420.2
Interest Expense 53.8 58.5
Interest Income 6.3 12.7
Income Before Income Taxes 417.9 374.4
Income Tax Expense 111.9 97.4
Income (Loss) From Equity Method Investments (5.3)
Net Income 306.0 271.7
Net Income Attributed To Noncontrolling Interests 18.2 13.6
Net Income – Omnicom Group Inc. $ 287.8   $ 258.1
Net Income Per Share – Omnicom Group Inc.
Basic $ 1.33   $ 1.19
Diluted $ 1.33   $ 1.19
Weighted average shares (in millions)
Basic 215.6 216.6
Diluted 216.8 217.5
Dividends Declared Per Common Share $ 0.70   $ 0.65
Omnicom Group Inc.
Detail of Operating Expenses
Three Months Ended March 31
(Unaudited) 
(Dollars in Millions)
2021 2020
Operating Expenses:
Salary and service costs
Salary and related service costs $ 1,649.2   $ 1,642.4
Third-party service costs 895.8 890.9
Occupancy and other costs 291.6 309.6
Costs of services 2,836.6 2,842.9
Selling, general and administrative expenses 71.6 86.8
Depreciation and amortization 53.3 57.0
Total Operating Expenses $ 2,961.5   $ 2,986.7
Omnicom Group Inc.
Reconciliation of Non-GAAP Financial Measures – EBITA
Three Months Ended March 31
(Unaudited)
(Dollars in Millions)
2021 2020  
Net Income – Omnicom Group Inc. $ 287.8     $ 258.1  
Net Income Attributed To Noncontrolling Interests 18.2 13.6  
Net Income 306.0 271.7  
Income (Loss) From Equity Method Investments (5.3)  
Income Tax Expense 111.9 97.4  
Income Before Income Taxes 417.9 374.4  
Interest Income 6.3 12.7  
Interest Expense 53.8 58.5  
Operating Profit 465.4 420.2  
Add back: Amortization of intangible assets 19.9 20.8  
Earnings before interest, taxes and amortization of intangible
assets (“EBITA”)
$ 485.3     $ 441.0  
Revenue $ 3,426.9 $ 3,406.9  
EBITA $ 485.3     $ 441.0  
EBITA Margin % 14.2 % 12.9 %

The above table reconciles the U.S. GAAP financial measure of Net Income – Omnicom Group Inc. to EBITA (defined as earnings before interest, taxes and amortization of intangible assets) and EBITA Margin (defined as EBITA divided by revenue) for the periods presented. We use EBITA and EBITA Margin as additional operating performance measures, which exclude the non-cash amortization expense of intangible assets (primarily consisting of amortization of intangible assets arising from acquisitions). Accordingly, we believe EBITA and EBITA Margin are useful measures for investors to evaluate the performance of our business. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP. Non-GAAP financial measures reported by us may not be comparable to similarly titled amounts reported by other companies.

DDB North America reinforces its commitment to data-driven creativity with executive hire

Jatinder Singh joins DDB North America as Chief Data Officer

NEW YORK, April 8, 2021 — DDB North America announced today the addition of a new regional leadership position. Jatinder Singh joins DDB North America as Chief Data Officer and, reporting into regional CEO Justin Thomas-Copeland, will spearhead data science innovation for all DDB North America offices.

Singh joins as DDB North America continues to fortify its data capabilities to underpin client work, following the appointment of Justin Thomas-Copeland in 2020. Thomas-Copland has championed data as a tool for marketers to harness and infuse insights which further drive creativity. To enable this, he has introduced new technology platforms which capture cultural insights and create scaled audience understanding.   

Singh will continue to diversify data usage across all functions of DDB North America and deliver solutions for clients across industries. 

“Jatinder Singh is an incredible operator and we’re excited to have him on board to fuel creativity in new and exciting ways for the region,” says Thomas-Copeland. “Jatinder is human first and will be instrumental in translating data insights into progressive, unexpected creative solutions that move mountains for our teams and clients and ensure that our creativity is always business accountable. He will be critical as we build out a DDB more integrated and creative than ever.”

Singh joins from within Omnicom, DDB’s holding network, and was previously the Global Chief Marketing Sciences Officer for the Omnicom Precision Marketing Group (OPMG). Singh’s career echoes DDB North America’s connective and creative spirit with data-driven creativity experiences including AT&T, Ford Motor Company, IBM, iShares, McDonald’s, Pfizer, SAP, Uber and the Volkswagen Group.

“DDB North America has made incredible strides in data science innovation to understand consumers and manifest this understanding in creative excellence. I am honored to be a part of such growth,” says Singh. “Data will continue to evolve and push creativity farther, DDB is the perfect incubator for the growth of both data and creativity.”

ABOUT DDB

DDB Worldwide (www.ddb.com) is one of the world’s largest and leading advertising and marketing networks. DDB has been named Agency of the Year numerous times by the Cannes International Festival of Creativity and the industry’s leading advertising publications and awards shows. WARC has listed DDB as one of the Top 3 Global Networks for 13 of the last 16 years. The agency’s clients include Unilever, Mars, Johnson & Johnson, and Molson Coors, among others.

Founded in 1949, DDB is part of the Omnicom Group (NYSE) and consists of more than 200 offices in over 90 countries with its flagship office in New York, NY.

ABOUT OMNICOM

Omnicom Group Inc. (NYSE – OMC) is a leading global marketing and corporate communications company. Omnicom’s branded networks and numerous specialty firms provide advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations and other specialty communications services to over 5,000 clients in more than 70 countries.

Omnicom Celebrates International Women’s Day 2021

In honor of Women’s History Month and International Women’s Day (IWD), Omnicom agencies around the world will come together to celebrate the professional and personal achievements of women within Omnicom Group and to reflect on progress made. This will also include several events hosted by local chapters of Omniwomen, Omnicom’s employee resource group that is dedicated to increasing the number and influence of women leaders throughout the Omnicom network. 

In addition to many of our agencies celebrating this year’s #ChooseToChallenge theme through social media campaigns, a number of them are also celebrating through unique virtual events. For a sampling of their IWD activities, please see the roundup provided below. 

If you have any questions about a particular event or inquiries on how to get involved, please reach out to Katie Beaule at [email protected].  

Omniwomen

Omniwomen Global is coordinating a Meet & Greet series where different Omniwomen from around the world will be paired together and connect virtually during the week of March 8th. There are 250 participants.

Below is a breakdown of additional chapter plans.

Chapter Plans:

  • On March 11th, Omniwomen Australia will welcome a keynote speaker to discuss a story of when women have chosen to challenge something in their career (a norm, a stereotype, an issue in the ad/marketing industry) and what happened next. The speaker will be followed by a panel that will highlight the stats from shEqual before looking at some of the key challenges women face in advertising and the ways different people have overcome these challenges.  
  • In honor of International Women’s Day, Omniwomen Chicago will host an event titled Omniwomen Chicago Presents: An Afternoon with Diane L. Parker. Diane L. Parker, playwright, actress, and VP of D&I at Meredith Corporation, will perform her original one-woman play Sick and Tired. Winner of the 2017 Strawberry One Act Festival, Sick and Tired tells the story of voting rights activist Fannie Lou Hamer. In 1962, Hamer was 44 years old and, though she dreamed of being a registered voter, could not vote. In spite of much adversity, including violent voter suppression tactics, Hamer helped make the right to vote become an accessible reality for Black Americans. Following the performance, Diane will join Omniwomen for a moderated Q&A session.
  • Omniwomen China plans to display a two-minute ‘Thank You, Thank Her’ video with true narratives and authentic stories from inspiring people in Greater China. The video will pay tribute to women who keep inspiring us with their resilience and courage in life.
  • Omniwomen LA will be hosting a fireside chat with Camilla Grozian‑Lorentzens, President of KERN. She will discuss the journey to where she’s at now, the biases she’s encountered, her allies, sponsors and more.
  • Omniwomen Mexico will hold a conference / panel around menopause. It will be a discussion with an Ob-gyn, a psychologist and a nutritionist to talk about menopause from different perspectives and develop dialogue among the group.

Designory, eg+ and Mother Tongue

Each day throughout the month, this group of agencies will feature a woman-focused item internally, highlighting an inspiring biography, podcast, article, poem, etc. Then, on IWD, they will post responses to short biographical questionnaires their women in senior leadership completed. They also will be raffling off 10 tickets to the California Conference for Women to employees who submitted stories of a woman that inspired them.  

Doremus North America

The agency’s employee resource group, PODD, will host two Speaker Series in the month, with agency leads and mid-mangers talking about their work-life balance and what it means to be an executive within the agency. In addition, each female employee will receive an acknowledgment certificate with a term of endearment from their manager.

GMR Marketing

This International Women’s Day, GMR is hosting signature speaker Mikaela Kiner, author of Female Firebrands who provides actionable ways women and men can advocate for an equal and diverse workplace. The session, held on March 8th, will be followed by small group chats that provide a more intimate forum to discuss Mikaela’s topics and tools. 

Later in the month, the agency will host a panel with representatives from Women’s Soccer who are revolutionizing the sports industry. In addition, employees will have a chance to support those in their local community who #ChoosetoChallenge through in-person donations and book purchases.

Omnicom Media Group 

Omnicom Media Group will be hosting two panels for employees this Women’s History Month. The first, titled We Are the Culture: Black Women and Fashion & Beauty,  will be held on March 18th. The Black Leadership Network (BLN) and Hearts & Science will host a panel discussion with Black-owned beauty and fashion business owners to discuss their companies, misconceptions about Black beauty and fashion, and how they respond to cultural appropriation in those industries.

Then, on March 23rd, the group will host I’m Speaking: Amplifying Black Women’s Voices. From recording studios to the mic stands at rallies, Black women are using their voices to move culture and society forward. The BLN, in partnership with Pandora, will celebrate Black women in audio and media and discuss the changes we need to make to carve a path for future women leaders. The panel discussion will be hosted by Nicole Buchanan, MC Sales Director for Pandora Multicultural.

Siegel + Gale

On March 8th, Siegel + Gale will host its annual IWD celebration. Margaret Molloy,  Global CMO of Siegel + Gale, will welcome five, top, global CMOs and moderate a panel conversation on their personal journeys and the massive role brands and marketing can play as we #ChooseToChallenge and strive for equity. Panelists will include:

  • Sanyu Dillon, Chief Marketing Officer, Penguin Random House
  • Lisa McKnight, SVP, Global Head of Barbie & Dolls Portfolio, Mattel 
  • Leanne Cutts, Group Chief Marketing Officer, HSBC
  • Huda Buhumaid, Chief Marketing Officer, Dubai Holding
  • Carla Piñeyro Sublett, SVP, Chief Marketing Officer, IBM

Omnicom Group Reports Fourth Quarter and Full Year 2020 Results

NEW YORK, Feb. 18, 2021 — Omnicom Group Inc. (NYSE: OMC) today announced net income – Omnicom Group Inc. for the fourth quarter of 2020 of $398.1 million compared to net income – Omnicom Group Inc. of $415.0 million in the fourth quarter of 2019. Diluted net income per share for the fourth quarter of 2020 was $1.84 per share compared to diluted net income per share of $1.89 for the fourth quarter of 2019.

Net income – Omnicom Group Inc. in the fourth quarter of 2020 includes a net aggregate after-tax decrease of $13.0 million related to asset impairment charges recorded during the period, partially offset by reimbursements and tax credits under government programs in several countries where we have operations, as discussed further below.

Primarily due to the negative effects on our revenue attributable to the COVID-19 pandemic, Omnicom’s worldwide revenue in the fourth quarter of 2020 decreased 9.3% to $3,757.0 million from $4,141.2 million in the fourth quarter of 2019. The components of the change in revenue included an increase in revenue from the positive impact of foreign currency translation of 0.8%, a decrease in acquisition revenue, net of disposition revenue of 0.5% and a decrease in revenue from negative organic growth of 9.6% when compared to the fourth quarter of 2019.  

Organic growth in the fourth quarter of 2020 as compared to the fourth quarter of 2019 in our five fundamental disciplines was as follows: Advertising decreased 9.7%, CRM Consumer Experience decreased 15.8%, CRM Execution & Support decreased 13.7%,  Public Relations increased 0.2% and Healthcare decreased 2.0%.

Across all of our regional markets, organic growth was negative in the fourth quarter of 2020 as compared to the fourth quarter of 2019. The decreases were as follows: the United States 9.4%, Other North America 3.2%, the United Kingdom 12.4%, the Euro Markets & Other Europe 9.2%, Asia Pacific 3.9%,  Latin America 9.2% and the Middle East & Africa  36.8%.

Operating profit decreased $31.7 million, or 4.9%, to $614.7 million compared to $646.4 million during the fourth quarter of 2019.  Our operating margin for the fourth quarter of 2020 increased to 16.4% versus 15.6% for the fourth quarter of 2019.

Operating profit for the fourth quarter of 2020 includes a net decrease aggregating $11.1 million due to asset impairment charges recognized in the period, partially offset by a decrease in operating expenses related to reimbursements and tax credits under government programs in several countries where we have operations, including the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) in the U.S., the Kurzarbeit program in Germany, and other programs in the U.K., France, Canada and other jurisdictions.

For the fourth quarter of 2020, our effective income tax rate decreased period-over-period to 25.0% from 26.1%.

Full Year

Net income – Omnicom Group Inc. for the twelve months ended December 31, 2020 decreased $393.7 million to $945.4 million compared to $1,339.1 million in the same period in 2019.  Diluted net income per share – Omnicom Group Inc. for the twelve months ended December 31, 2020 decreased $1.69 to $4.37 per share compared to $6.06 per share for the twelve months ended December 31, 2019.

Net income – Omnicom Group Inc. for the twelve months ended December 31, 2020 includes a net after-tax decrease of $146.8 million as a result of COVID-19 repositioning costs and a net loss on dispositions during the second quarter of 2020, asset impairment charges recorded during the fourth quarter of 2020, and credits related to reimbursements and tax credits under government programs in several countries where we have operations, as discussed further below.

Primarily due to the negative effects on our revenue attributable to the COVID-19 pandemic in the second through fourth quarters of 2020, worldwide revenue for the twelve months ended December 31, 2020 decreased 11.9% to $13,171.1 million from $14,953.7 million in the same period of 2019.  The components of the change in revenue included a decrease in revenue from the negative impact of foreign currency translation of 0.4%, a decrease in acquisition revenue, net of disposition revenue of 0.4% and a decrease in revenue from negative organic growth of 11.1% when compared to the same period of 2019.

Organic growth for the twelve months ended December 31, 2020 compared to the same period in 2019 in our five fundamental disciplines was as follows: Advertising decreased 12.2%, CRM Consumer Experience decreased 15.8%, CRM Execution & Support decreased 15.1%, Public Relations decreased 4.2% and Healthcare increased 3.3%.

Across all of our regional markets, organic growth was negative for the twelve months ended December 31, 2020 as compared to the same period of 2019.  The decreases were as follows: the United States 10.1%, Other North America 10.0%, the United Kingdom 11.5%, the Euro Markets & Other Europe 12.8%, Asia Pacific 8.5%, Latin America 15.1% and the Middle East & Africa  32.3%.

Operating profit decreased $523.5 million, or 24.7%, to $1,598.8 million from $2,122.3 million for the twelve months ended December 31, 2019. Our operating margin for the twelve months ended December 31, 2020 decreased to 12.1% versus 14.2% for the same period of 2019. 

Operating profit for the twelve months ended December 31, 2020 includes a net decrease aggregating $171.1 million due to COVID-19 repositioning costs recorded during the second quarter of 2020, comprised of incremental severance charges, right-of-use asset impairments and other real estate costs of $252.8 million, and a net loss on the disposition of certain subsidiaries and other charges of $25.1 million, and asset impairment charges recorded during the fourth quarter of 2020 of $55.8 million, partially offset by reimbursements and tax credits under government programs in several countries where we have operations, including the CARES Act in the U.S., the Kurzarbeit program in Germany, and other programs in the U.K., France, Canada and other jurisdictions, which reduced salary and service costs by $162.6 million.

Our effective tax rate for the twelve months ended December 31, 2020 increased period-over-period to 27.1% from 26.0%. The non-deductibility in certain jurisdictions of a portion of the COVID-19 repositioning costs recorded in the second quarter of 2020 had the effect of increasing our effective tax rate for the twelve months ended December 31, 2020. This increase was substantially offset by a lower effective tax rate on our foreign earnings resulting from a change in legislation. In 2019, income tax expense was reduced by $10.8 million primarily from the net favorable settlements of uncertain tax positions in certain jurisdictions.  After considering these items, our effective tax rate for the twelve months ended December 31, 2020 would have approximated the rate for 2019.

COVID-19 Business Update

The COVID-19 pandemic has significantly impacted the global economy, our business and the results of operations. Public health efforts to mitigate the impact of the pandemic include government actions such as travel restrictions, limitations on public gatherings, shelter in place orders and mandatory closures. These actions have negatively impacted many of our clients’ businesses and in turn clients have reduced or plan to reduce their demand for our services. As a result, we experienced a reduction in our revenue beginning late in the first quarter of 2020, as compared to the same period in 2019.  The reduction in our revenue continued through the remainder of 2020 and is expected to continue through the first half of 2021. Such reductions in revenue could adversely impact our ongoing results of operations and financial position and the effects could be material.

While we expect the pandemic to affect substantially all of our clients, certain industry sectors have been affected more significantly than others, including travel, lodging and entertainment, energy and oil and gas, non-essential retail and automotive. Clients in these industries have acted to cut costs, including postponing or reducing marketing communication expenditures. While certain industries such as healthcare and pharmaceuticals, technology and telecommunications, financial services and consumer products have fared relatively well to date, conditions are volatile and economic uncertainty cuts across all clients, industries and geographies. Overall, while we have a diversified portfolio of service offerings, clients and geographies, demand for our services can be expected to decline as marketers reduce expenditures in the short term due to the uncertain impact of the pandemic on the global economy. During the second quarter of 2020, we realigned our agencies’ cost structures, which included severance actions and furloughs to reduce the workforce, right-of-use asset impairments and other real estate costs, a net loss on the disposition of certain subsidiaries and other charges. These COVID-19 repositioning actions were taken to tailor their services and capabilities to changes in client demand.

As we previously reported, during the first half of 2020, we took numerous proactive steps to strengthen our liquidity and financial position that we expect will help mitigate the potential impacts of COVID-19, including:

  • The amendment and extension of our $2.5 billion credit facility to February 2025,
  • The suspension of our share repurchase program,
  • The issuance in February of $600 million 10-year 2.45% Senior Notes, which were used to finance the early redemption of the remaining $600 million of 4.45% Senior Notes that were due in August 2020,
  • The issuance in early April of an additional $600 million 10-year 4.20% Senior Notes, and
  • The completion in early April of a $400 million 364-day revolving credit facility, which is in addition to our existing $2.5 billion revolving credit facility that expires in February 2025.

We have no long-term debt maturing until May 2022.

Definitions – Components of Revenue Change

We use certain terms in describing the components of the change in revenue above.

Foreign exchange rate impact: calculated by translating the current period’s local currency revenue using the prior period average exchange rates to derive current period constant currency revenue. The foreign exchange rate impact is the difference between the current period revenue in U.S. Dollars and the current period constant currency revenue.

Acquisition revenue, net of disposition revenue: Acquisition revenue is calculated as if the acquisition occurred twelve months prior to the acquisition date by aggregating the comparable prior period revenue of acquisitions through the acquisition date. As a result, acquisition revenue excludes the positive or negative difference between our current period revenue subsequent to the acquisition date and the comparable prior period revenue and the positive or negative growth after the acquisition date is attributed to organic growth. Disposition revenue is calculated as if the disposition occurred twelve months prior to the disposition date by aggregating the comparable prior period revenue of disposals through the disposition date. The acquisition revenue and disposition revenue amounts are netted in the description above.

Organic growth: calculated by subtracting the foreign exchange rate impact component and the acquisition revenue, net of disposition revenue component from total revenue growth.

Forward-looking Statements

Certain statements in this press release related to the potential impact of the COVID-19 outbreak constitute forward-looking statements, including statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of the Company’s management as well as assumptions made by, and information currently available to, the Company’s management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “should,” “would,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or similar words, phrases or expressions.

Forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control. Therefore, you should not place undue reliance on such statements. You should carefully consider this and the other risks and uncertainties that may affect the Company’s business, including those described in Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K and other documents filed from time to time with the Securities and Exchange Commission. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements.

Conference Call

Omnicom will host a conference call to review the fourth quarter and full year 2020 financial results on Thursday, February 18, 2021 at 8:30 a.m. ET. Participants can listen to the conference call by dialing (877) 336-4440 (domestic) or (409) 207-6984 (international), along with access code 5410296. The call will also be simulcast and archived on our website at: https://investor.omnicomgroup.com/investor-relations/news-events-and-filings.

About Omnicom Group Inc.

Omnicom Group Inc. (NYSE: OMC) (www.omnicomgroup.com) is a leading global marketing and corporate communications company.  Omnicom’s branded networks and numerous specialty firms provide advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations and other specialty communications services to over 5,000 clients in more than 70 countries.  Follow us on Twitter for the latest news.

Omnicom Group Inc.
Consolidated Statements of Income
Three Months Ended December 31
(Unaudited)                                                                                                                            
(Dollars in Millions, Except Per Share Data)



2020 (a)


2019





Revenue

$

3,757.0



$

4,141.2


Operating Expenses:




Salary and service costs

2,721.2



3,034.7


Occupancy and other costs

265.9



306.4


Costs of services

2,987.1



3,341.1


Selling, general and administrative expenses

101.4



97.5


Depreciation and amortization

53.8



56.2



3,142.3



3,494.8


Operating Profit

614.7



646.4


Interest Expense

55.3



52.0


Interest Income

7.3



13.4


Income Before Income Taxes

566.7



607.8


Income Tax Expense

141.5



158.8


Income From Equity Method Investments

3.3



0.8


Net Income

428.5



449.8


Net Income Attributed To Noncontrolling Interests

30.4



34.8


Net Income – Omnicom Group Inc.

$

398.1



$

415.0






Net Income Per Share – Omnicom Group Inc.




Basic

$

1.85



$

1.90


Diluted

$

1.84



$

1.89






Weighted average shares (in millions)




Basic

215.5



218.2


Diluted

216.1



219.3






Dividends Declared Per Common Share

$

0.65



$

0.65




(a)     

Salary and service costs for the fourth quarter of 2020 includes asset impairment charges recognized in the period, partially offset by a decrease in operating
expenses related to reimbursements and tax credits under government programs in several countries where we have operations, including the CARES Act in
the U.S., the Kurzarbeit program in Germany, and other programs in the U.K., France, Canada and other jurisdictions. The net aggregate impact of these items
increased salary and related service costs and decreased Operating Profit by $11.1 million and Net Income – Omnicom Group Inc. by $13.0 million for the three
months ended December 31, 2020.

 

Omnicom Group Inc.
Consolidated Statements of Income
Twelve Months Ended December 31
(Unaudited)                                                                                                                            
(Dollars in Millions, Except Per Share Data)



2020 (a) (b)


2019





Revenue

$

13,171.1



$

14,953.7


Operating Expenses:




Salary and service costs

9,572.8



10,972.2


Occupancy and other costs

1,138.5



1,221.8


COVID-19 repositioning costs

277.9




Costs of services

10,989.2



12,194.0


Selling, general and administrative expenses

360.5



405.9


Depreciation and amortization

222.6



231.5



11,572.3



12,831.4


Operating Profit

1,598.8



2,122.3


Interest Expense

221.8



244.3


Interest Income

32.3



60.3


Income Before Income Taxes

1,409.3



1,938.3


Income Tax Expense

381.7



504.4


Income (Loss) From Equity Method Investments

(6.8)



2.0


Net Income

1,020.8



1,435.9


Net Income Attributed To Noncontrolling Interests

75.4



96.8


Net Income – Omnicom Group Inc.

$

945.4



$

1,339.1






Net Income Per Share – Omnicom Group Inc.




Basic

$

4.38



$

6.09


Diluted

$

4.37



$

6.06






Weighted average shares (in millions)




Basic

215.6



219.8


Diluted

216.2



220.9






Dividends Declared Per Common Share

$

2.60



$

2.60




(a)     

During the second quarter of 2020, we recorded expenses for certain repositioning actions related to the realignment of our businesses in reaction to the COVID-19
pandemic and recorded a net loss on the disposition of certain subsidiaries. The impact of these items decreased Operating Profit by $277.9 million and Net Income –
Omnicom Group Inc. by $223.1 million for the twelve months ended December 31, 2020.

(b)    

Salary and service costs includes the reduction in operating expenses related to reimbursements and tax credits under government programs in several countries
where we have operations, including the CARES Act in the U.S., the Kurzarbeit program in Germany, and other programs in the U.K., France, Canada and other
jurisdictions, partially offset by the impact of asset impairment charges recorded during the fourth quarter of 2020. The impact of these items reduced salary and
related service costs and increased Operating Profit by $106.8 million and Net Income – Omnicom Group Inc. by $76.3 million for the twelve months ended December 31, 2020.

 

Omnicom Group Inc.
Detail of Operating Expenses
Three Months Ended December 31
(Unaudited)                                                                                                                            
(Dollars in Millions)



2020


2019





Operating Expenses:




Salary and service costs




Salary and related service costs

$

1,682.6



$

1,844.6


Third-party service costs

1,038.6



1,190.1


Occupancy and other costs

265.9



306.4


Costs of services

2,987.1



3,341.1


Selling, general and administrative expenses

101.4



97.5


Depreciation and amortization

53.8



56.2


Total Operating Expenses

$

3,142.3



$

3,494.8


 

Omnicom Group Inc.
Detail of Operating Expenses
Twelve Months Ended December 31
(Unaudited)                                                                                                                            
(Dollars in Millions)



2020


2019





Operating Expenses:




Salary and service costs




Salary and related service costs

$

6,250.9



$

6,895.2


Third-party service costs

3,321.9



4,077.0


Occupancy and other costs

1,138.5



1,221.8


COVID-19 repositioning costs

277.9




Costs of services

10,989.2



12,194.0


Selling, general and administrative expenses

360.5



405.9


Depreciation and amortization

222.6



231.5


Total Operating Expenses

$

11,572.3



$

12,831.4


 

Omnicom Group Inc.
Impact of Government Wage Programs and Asset Impairments
Three Months Ended December 31, 2020
(Unaudited)                                                                                                                            
(Dollars in Millions)



Three Months ended December 31, 2020


Gov’t Wage
Programs

Asset
Impairments and
Other


Total






Operating Expenses (a) (b):





Salary and service costs





Salary and related service costs

$

(44.7)


$

55.8



$

11.1


Third-party costs





Occupancy and other costs





Costs of services

(44.7)


55.8



11.1


Selling, general and administrative expenses





Depreciation and amortization





Operating Expenses

$

(44.7)


$

55.8



$

11.1







 



(a)   

The above table identifies the pre-tax impact of asset impairment charges recorded in the fourth quarter of 2020, which increased salary and related service costs
and decreased operating profit by $55.8 million for the three months ended December 31, 2020.

(b)     

Additionally, salary and related service costs for the fourth quarter of 2020 includes the reduction in operating expenses related to reimbursements and tax credits
under government programs in several countries where we have operations.  The impact of these items reduced salary and related service costs and increased
operating profit by $44.7 million for the three months ended December 31, 2020.

 

Omnicom Group Inc.
Impact of COVID-19 Repositioning Costs, Government Wage Programs and Asset Impairments
Twelve Months Ended December 31, 2020
(Unaudited)                                                                                                                            
(Dollars in Millions)



Twelve Months ended December 31, 2020


Severance
Actions

Real Estate
Actions

Gov’t Wage
Programs

Asset
Impairments 
and Other


Total








Operating Expenses (a) (b) (c):







Salary and service costs







Salary and related service costs

$


$


$

(162.6)


$

55.8



$

(106.8)


Third-party costs







Occupancy and other costs







COVID-19 repositioning costs

150.0


102.8



25.1



277.9


Costs of services

150.0


102.8


(162.6)


80.9



171.1


Selling, general and administrative expenses







Depreciation and amortization







Operating Expenses

$

150.0


$

102.8


$

(162.6)


$

80.9



$

171.1









 



(a)  

The above table identifies the pre-tax impact of certain repositioning actions related to the realignment of our businesses in reaction to the COVID-19 pandemic
and recorded a net loss on the disposition of certain subsidiaries of $277.9 million for the twelve months ended December 31, 2020.  

(b)   

Salary and related service costs for the twelve months ended December 31, 2020 includes the reduction in operating expenses related to reimbursements
and tax credits under government programs in several countries where we have operations.  The impact of these items reduced salary and related service costs
and increased operating profit by $162.6 million for the twelve months ended December 31, 2020.

(c)   

Salary and related service costs for the twelve months ended December 31, 2020 includes asset impairment charges recorded in the fourth quarter of 2020,
which increased salary and related service costs and decreased Operating Profit by $55.8 million for the twelve months ended December 31, 2020.

Omnicom Group Inc. Increases Stock Dividend by 7.7% to $0.70 Per Share

NEW YORK, Feb. 18, 2021 – The Board of Directors of Omnicom Group Inc. (NYSE: OMC) increased the corporation’s quarterly cash dividend to $0.70 per common share, or $2.80 per share of common stock on an annual basis. This represents an 7.7% increase versus the prior quarterly dividend of $0.65 per share, or $2.60 on an annual basis. The increased dividend is payable on April 8, 2021 to Omnicom Group common shareholders of record at the close of business on March 10, 2021.

ABOUT OMNICOM GROUP INC. 
Omnicom Group (www.omnicomgroup.com) is a leading global marketing and corporate communications company.  Omnicom’s branded networks and numerous specialty firms provide advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations and other specialty communications services to over 5,000 clients in more than 70 countries. Follow us on Twitter for the latest news.

Omnicom Group Schedules Fourth Quarter and Full Year 2020 Earnings Release and Conference Call

NEW YORK, Feb. 16, 2021 — Omnicom Group Inc. (NYSE: OMC) will publish its fourth quarter and full year 2020 results on Thursday, February 18, 2021 before the New York Stock Exchange opens. The company will also host a conference call to review the financial results on Thursday, February 18, 2021 starting at 8:30 a.m. ET.  Participants may listen to the conference call by dialing (877) 336-4440 (domestic) or (409) 207-6984 (international), along with access code 5410296. The conference call will be simulcast and archived on our website at investor.omnicomgroup.com

About Omnicom Group Inc.
Omnicom Group (www.omnicomgroup.com) is a leading global marketing and corporate communications company. Omnicom’s branded networks and numerous specialty firms provide advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations and other specialty communications services to over 5,000 clients in more than 70 countries. Follow us on Twitter for the latest news.

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