Omnicom Group Reports First Quarter 2021 Results Posted on April 20, 2021April 27, 2021 by Katie Beaule 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 intangibleassets (“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 Posted on April 8, 2021April 13, 2021 by Katie Beaule 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 Posted on March 8, 2021March 8, 2021 by Katie Beaule 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 HouseLisa McKnight, SVP, Global Head of Barbie & Dolls Portfolio, Mattel Leanne Cutts, Group Chief Marketing Officer, HSBCHuda Buhumaid, Chief Marketing Officer, Dubai HoldingCarla Piñeyro Sublett, SVP, Chief Marketing Officer, IBM
Omnicom Group Reports Fourth Quarter and Full Year 2020 Results Posted on February 18, 2021March 24, 2021 by Katie Beaule 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, andThe 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 operatingexpenses related to reimbursements and tax credits under government programs in several countries where we have operations, including the CARES Act inthe 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 itemsincreased 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 otherjurisdictions, partially offset by the impact of asset impairment charges recorded during the fourth quarter of 2020. The impact of these items reduced salary andrelated 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 AssetImpairments 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 creditsunder 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 AssetImpairments 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 pandemicand 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 Posted on February 18, 2021February 18, 2021 by Katie Beaule 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 Posted on February 16, 2021February 18, 2021 by Katie Beaule 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.