Revenue of $3,578.1
million, with organic growth of 3.3%
Operating
income of $560.8
million
Operating income margin of
15.7%
Diluted earnings per share of $1.86
NEW
YORK, Oct. 17, 2023 /PRNewswire/ -- Omnicom
(NYSE: OMC) today announced results for the quarter ended
September 30, 2023.
"We are pleased with our strong organic revenue growth of 3.3%,
with notable performances in our Advertising & Media, Precision
Marketing, and Healthcare disciplines. Our year-to-date organic
growth of 4.0% remains in line with our full-year expectations,
which reflects the resiliency of our business even in periods of
economic uncertainty," said John
Wren, Chairman and Chief Executive Officer of Omnicom.
"Omnicom continued to post strong profitability and earnings growth
in the quarter, and our recent business wins validate the benefits
of our client strategy in this rapidly evolving marketplace. We are
very well positioned for a recovery in business conditions, with a
strong balance sheet and leading creativity in all of our service
disciplines."
Third Quarter 2023
Results
|
|
|
Three Months
Ended
September 30,
|
$ in millions,
except per share amounts
|
2023
|
|
|
2022
|
Revenue
|
$ 3,578.1
|
|
|
$
3,443.4
|
Operating
Income
|
560.8
|
|
|
546.0
|
Operating Income
Margin
|
15.7 %
|
|
|
15.9 %
|
Net Income
1
|
371.9
|
|
|
364.5
|
Net Income per Share -
Diluted 1
|
$ 1.86
|
|
|
$
1.77
|
EBITA2
|
581.1
|
|
|
566.1
|
EBITA
Margin2
|
16.2 %
|
|
|
16.4 %
|
Notes: 1) Net Income
and Net Income per Share for Omnicom Group Inc.; 2) See non-GAAP
reconciliations starting on page 8.
|
Revenues
Reported revenue in the third quarter of 2023
increased $134.7 million, or 3.9%, to
$3,578.1 million. Worldwide
revenue growth in the third quarter of 2023 compared to the third
quarter of 2022 was led by an increase in organic growth of
$113.1 million, or 3.3%. The
impact of foreign currency translation increased revenue by
$59.1 million, or 1.7%.
Acquisition revenue, net of disposition revenue, reduced revenue by
$37.5 million, or 1.1%, primarily due
to dispositions earlier in the year in the Execution & Support
discipline, partially offset by acquisitions in the third quarter
of 2023 in the Advertising & Media and Public Relations
disciplines.
Organic growth by discipline in the third quarter of 2023
compared to the third quarter of 2022 was as follows: 6.1% for
Advertising & Media, 4.3% for Precision Marketing, 3.8% for
Healthcare, and 9.2% for Experiential. Organic decline by
discipline was as follows: 5.5% for Public Relations, 3.6% for
Execution & Support, and 1.7% for Commerce & Branding.
Organic growth by region in the third quarter of 2023 compared
to the third quarter of 2022 was as follows: 2.7% for the United States, 5.7% for Euro Markets &
Other Europe, 4.4% for the United
Kingdom, 19.2% for Latin
America, and 2.5% for Asia
Pacific. Organic decline by region was as follows: 10.8% for
the Middle East & Africa, and 1.7% for Other North America.
Expenses
Operating expenses increased $119.9 million, or 4.1%, to $3,017.3 million in the third quarter of 2023
compared to the third quarter of 2022.
Salary and service costs, which tend to fluctuate with changes
in revenue, are comprised of salary and related costs, third-party
service costs, and third-party incidental costs. Salary and
service costs include employee compensation and benefits costs and
freelance labor. Salary and service costs increased $110.4 million, or 4.5%, to $2,586.5 million. Salary and related costs
increased $7.6 million, or 0.4%, to
$1,756.7 million, primarily due to an
increase in headcount as a result of organic growth and
acquisitions. Third-party service costs include third-party
supplier costs when we act as principal in providing services to
our clients. Third-party incidental costs primarily consist of
client-related travel and incidental out-of-pocket costs that we
bill back to the client directly at our cost and which we are
required to include in revenue. Third-party service costs increased
$90.6 million, or 15.4%, to
$678.8 million as a result of organic
growth, and third-party incidental costs increased $12.2 million, or 8.8%, to $151.0 million.
Occupancy and other costs, which are less directly linked to
changes in revenue than salary and service costs, increased
$7.6 million, or 2.7%, to
$288.6 million, due to increases in
other occupancy expenses, partially offset by lower rent.
SG&A expenses increased $3.4
million, or 3.9%, to $89.8
million, primarily due to higher professional fees related
to acquisitions.
Operating Income
Operating income increased
$14.8 million, or 2.7%, to
$560.8 million in the third quarter
of 2023 compared to the third quarter of 2022. The related
operating income margin was 15.7% compared to 15.9% for the third
quarter of 2022.
Interest Expense, net
Net interest expense in the
third quarter of 2023 increased $9.2
million to $38.3 million
compared to the third quarter of 2022. Interest expense increased
$1.5 million to $53.5 million, and interest income decreased
$7.7 million to $15.2 million primarily due to lower cash and
short term investment balances.
Income Taxes
Our effective tax rate of 26% in the
third quarter of 2023 was flat with the rate in the third quarter
of 2022.
Net Income – Omnicom Group Inc. and Diluted Net Income per
Share
Net income - Omnicom Group Inc. for the third quarter
of 2023 increased $7.4 million, or
2.0%, to $371.9 million compared to
the third quarter of 2022. Diluted shares outstanding for the third
quarter of 2023 decreased 3.1% to 199.9 million from 206.3 million
in the third quarter of 2022 as a result of net share repurchases.
Diluted net income per share of $1.86
increased $0.09, or 5.1%, from
$1.77 per share.
EBITA
EBITA increased $15.0
million, or 2.6%, to $581.1
million in the third quarter of 2023 compared to the third
quarter of 2022. The related EBITA margin was 16.2% compared to
16.4% for the third quarter of 2022.
Risks and Uncertainties
Current global economic
challenges, including the war in Ukraine, high and sustained inflation, rising
interest rates, supply chain disruptions, credit market
deterioration, and other macroeconomic factors, could cause
economic uncertainty and volatility. The impact of these issues on
our business will vary by geographic market and discipline. We
closely monitor economic conditions, client revenue levels and
other factors. In response to reductions in revenue, we can take
actions to align our cost structure with changes in client demand
and manage our working capital. However, there can be no assurance
as to the effectiveness of our efforts to mitigate any impact of
the current and future adverse economic conditions, reductions in
client revenue, changes in client creditworthiness, and other
developments.
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.
Conference Call
Omnicom will host a conference call to
review its financial results on Tuesday, October 17, 2023 at
4:30 p.m. Eastern Time. Participants
can listen to the conference call by calling 844-291-5494
(domestic) or 409-207-6995 (international), along with access code
4961768. The call will also be simulcast and archived on our
investor relations website.
Corporate Responsibility
At Omnicom, we are committed
to promoting responsible practices and making positive
contributions to society around the globe. Please explore our
website (omnicomgroup.com/corporate-responsibility) for highlights
of our progress across the areas on which we focus: Empower People,
Protect Our Planet, Lead Responsibly.
About Omnicom
Omnicom (www.omnicomgroup.com) is a
leading global marketing and corporate communications company.
Omnicom's branded networks and numerous specialty firms offer
services in advertising, strategic media planning and buying,
precision marketing, commerce and branding, experiential, customer
relationship marketing (CRM), public relations, healthcare
marketing and other specialty communications services to over 5,000
clients in more than 70 countries.
Non-GAAP Financial Measures
We present financial
measures determined in accordance with generally accepted
accounting principles in the United
States ("GAAP") and adjustments to the GAAP presentation
("Non-GAAP"), which we believe are meaningful for understanding our
performance. EBITA is defined as operating income before interest,
taxes, and amortization of intangible assets, and EBITA margin is
defined as EBITA divided by revenue. 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 arising from acquisitions). We also use
Adjusted Operating Income, Adjusted Operating Income Margin,
Adjusted EBITA, Adjusted EBITA Margin, Adjusted Income Tax Expense,
Adjusted Net Income – Omnicom Group Inc. and Adjusted Net Income
per diluted share – Omnicom Group Inc. as additional operating
performance measures. We believe these measures are useful in
evaluating the impact of certain items on operating performance and
allow for comparability between reporting periods. Non-GAAP
financial measures should not be considered in isolation from, or
as a substitute for, financial information presented in accordance
with GAAP. Non-GAAP financial measures as reported by us may not be
comparable to similarly titled amounts reported by other
companies.
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, the Company or
its 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 position, 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.
These 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.
Factors that could cause actual results to differ materially from
those in the forward-looking statements include: adverse economic
conditions, including those caused by the war in Ukraine, the lingering effects of the COVID-19
pandemic, high and persistent inflation in countries that comprise
our major markets, rising interest rates, and supply chain issues
affecting the distribution of our clients' products; international,
national or local economic conditions that could adversely affect
the Company or its 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
or a disruption 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 related
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 the Company or its clients;
risks associated with assumptions the Company makes in connection
with its critical accounting estimates and legal proceedings; and
the Company's international operations, which are subject to the
risks of currency repatriation restrictions, social or political
conditions and regulatory environment;effectively managing the
risks, challenges and efficiencies presented by utilizing
Artificial Intelligence (AI) technologies and partnerships in our
business; and risks related to our environmental, social and
governance goals and initiatives, including impacts from regulators
and other stakeholders, and the impact of factors outside of our
control on such goals and initiatives. The foregoing list of
factors is not exhaustive. You should carefully consider the
foregoing factors 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
Annual Report on Form 10-K for the year ended December 31,
2022. Except as required under applicable law, the Company does not
assume any obligation to update these forward-looking
statements.
OMNICOM GROUP INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(Unaudited)
|
(In millions, except
per share amounts)
|
|
|
Three Months Ended
September
30,
|
|
2023
|
|
2022
|
Revenue
|
$
3,578.1
|
|
$
3,443.4
|
Operating
Expenses:
|
|
|
|
Salary and service
costs
|
2,586.5
|
|
2,476.1
|
Occupancy and other
costs
|
288.6
|
|
281.0
|
Cost of
services
|
2,875.1
|
|
2,757.1
|
Selling, general and
administrative expenses
|
89.8
|
|
86.4
|
Depreciation and
amortization
|
52.4
|
|
53.9
|
Total operating
expenses
|
3,017.3
|
|
2,897.4
|
Operating
Income
|
560.8
|
|
546.0
|
Interest
Expense
|
53.5
|
|
52.0
|
Interest
Income
|
15.2
|
|
22.9
|
Income Before Income
Taxes and Income From Equity Method Investments
|
522.5
|
|
516.9
|
Income Tax
Expense
|
136.1
|
|
134.7
|
Income From Equity
Method Investments
|
1.9
|
|
1.1
|
Net
Income
|
388.3
|
|
383.3
|
Net Income Attributed
To Noncontrolling Interests
|
16.4
|
|
18.8
|
Net Income - Omnicom
Group Inc.
|
$
371.9
|
|
$
364.5
|
Net Income Per Share -
Omnicom Group Inc.:
|
|
|
|
Basic
|
$
1.88
|
|
$
1.78
|
Diluted
|
$
1.86
|
|
$
1.77
|
|
|
|
|
Revenue
|
$
3,578.1
|
|
$
3,443.4
|
Operating Margin
%
|
15.7 %
|
|
15.9 %
|
EBITA
|
$
581.1
|
|
$
566.1
|
EBITA Margin
%
|
16.2 %
|
|
16.4 %
|
|
|
|
|
Dividends Declared Per
Common Share
|
$
0.70
|
|
$
0.70
|
OMNICOM GROUP INC.
AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(Unaudited)
|
(In millions, except
per share amounts)
|
|
|
Nine Months Ended
September
30,
|
|
2023
|
|
2022
|
Revenue
|
$
10,631.3
|
|
$
10,420.9
|
Operating
Expenses:
|
|
|
|
Salary and service
costs
|
7,747.2
|
|
7,533.9
|
Occupancy and other
costs
|
877.9
|
|
874.2
|
Real estate and other
repositioning costs1,2
|
191.5
|
|
—
|
Charges arising from
the effects of the war in Ukraine2
|
—
|
|
113.4
|
Gain on disposition of
subsidiary1
|
(78.8)
|
|
—
|
Cost of
services
|
8,737.8
|
|
8,521.5
|
Selling, general and
administrative expenses
|
278.1
|
|
294.0
|
Depreciation and
amortization
|
157.4
|
|
164.8
|
Total operating
expenses
|
9,173.3
|
|
8,980.3
|
Operating
Income
|
1,458.0
|
|
1,440.6
|
Interest
Expense
|
165.9
|
|
154.2
|
Interest
Income
|
80.9
|
|
42.2
|
Income Before Income
Taxes and Income From Equity Method Investments
|
1,373.0
|
|
1,328.6
|
Income Tax
Expense1,2
|
360.7
|
|
383.3
|
Income From Equity
Method Investments
|
3.1
|
|
2.6
|
Net
Income1,2
|
1,015.4
|
|
947.9
|
Net Income Attributed
To Noncontrolling Interests
|
49.7
|
|
61.2
|
Net Income - Omnicom
Group Inc.1,2
|
$
965.7
|
|
$
886.7
|
Net Income Per Share -
Omnicom Group Inc.:
|
|
|
|
Basic
|
$
4.84
|
|
$
4.30
|
Diluted1,2
|
$
4.78
|
|
$
4.27
|
|
|
|
|
Revenue
|
$
10,631.3
|
|
$
10,420.9
|
Operating Margin
%
|
13.7 %
|
|
13.8 %
|
EBITA
|
$
1,516.9
|
|
$
1,500.9
|
EBITA Margin
%
|
14.3 %
|
|
14.4 %
|
|
|
|
|
Dividends Declared Per
Common Share
|
$
2.10
|
|
$
2.10
|
|
(1)
|
For the nine months
ended September 30, 2023, operating expenses included real estate
operating lease impairment charges, severance, and other exit costs
related to repositioning actions we took in the first and second
quarters of 2023 to reduce our real estate requirements, rebalance
our workforce, and consolidate operations in certain markets. In
addition, in the second quarter of 2023, we recorded a gain on
disposition of certain of our research businesses in the Execution
& Support discipline. The net aggregate impact to Operating
Income for the nine months ended September 30, 2023 was a reduction
of $112.7 million ($89.6 million after tax). The net aggregate
effect of these items in the nine months ended September 30, 2023
to diluted net income per share - Omnicom Group Inc. was a decrease
of $0.44.
|
|
(2)
|
For the nine months
ended September 30, 2022, operating expenses included $113.4
million of charges recorded in the first quarter of 2022 as well as
an additional net income tax charge of $4.8 million related to the
disposition of our businesses in Russia, which reduced net income -
Omnicom Group Inc. by $118.2 million and diluted net income per
share - Omnicom Group Inc. by $0.57.
|
|
|
OMNICOM GROUP INC.
AND SUBSIDIARIES
|
DETAIL OF OPERATING
EXPENSES
|
(Unaudited)
|
(In
millions)
|
|
|
Three Months Ended
September
30,
|
|
2023
|
|
2022
|
Revenue
|
$
3,578.1
|
|
$
3,443.4
|
Operating
Expenses:
|
|
|
|
Salary and service
costs:
|
|
|
|
Salary and related
costs
|
1,756.7
|
|
1,749.1
|
Third-party service
costs1
|
678.8
|
|
588.2
|
Third-party incidental
costs2
|
151.0
|
|
138.8
|
Total salary and
service costs
|
2,586.5
|
|
2,476.1
|
Occupancy and other
costs
|
288.6
|
|
281.0
|
Cost of services
|
2,875.1
|
|
2,757.1
|
Selling, general and
administrative expenses
|
89.8
|
|
86.4
|
Depreciation and
amortization
|
52.4
|
|
53.9
|
Total operating
expenses
|
3,017.3
|
|
2,897.4
|
Operating
Income
|
$
560.8
|
|
$
546.0
|
|
Nine Months Ended
September
30,
|
|
2023
|
|
2022
|
Revenue
|
$
10,631.3
|
|
$
10,420.9
|
Operating
Expenses:
|
|
|
|
Salary and service
costs:
|
|
|
|
Salary and related
costs
|
5,306.7
|
|
5,344.5
|
Third-party service
costs1
|
2,033.9
|
|
1,799.0
|
Third-party incidental
costs2
|
406.6
|
|
390.4
|
Total salary and
service costs
|
7,747.2
|
|
7,533.9
|
Occupancy and other
costs
|
877.9
|
|
874.2
|
Real estate and other
repositioning costs
|
191.5
|
|
—
|
Charges arising from
the effects of the war in Ukraine
|
—
|
|
113.4
|
Gain on disposition of
subsidiary
|
(78.8)
|
|
—
|
Cost of services
|
8,737.8
|
|
8,521.5
|
Selling, general and
administrative expenses
|
278.1
|
|
294.0
|
Depreciation and
amortization
|
157.4
|
|
164.8
|
Total operating
expenses
|
9,173.3
|
|
8,980.3
|
Operating
Income
|
$
1,458.0
|
|
$
1,440.6
|
(1)
|
Third-party service
costs include third-party supplier costs when we act as principal
in providing services to our clients.
|
(2)
|
Third-party incidental
costs primarily consist of client-related travel and incidental
out-of-pocket costs which we bill back to the client directly
at our cost and which we are required to include in
revenue.
|
|
|
OMNICOM GROUP INC.
AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
(Unaudited)
|
(In
millions)
|
|
|
Three Months Ended
September
30,
|
|
Nine Months Ended
September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net Income -
Omnicom Group Inc.
|
$
371.9
|
|
$
364.5
|
|
$
965.7
|
|
$
886.7
|
Net Income Attributed
To Noncontrolling Interests
|
16.4
|
|
18.8
|
|
49.7
|
|
61.2
|
Net
Income
|
388.3
|
|
383.3
|
|
1,015.4
|
|
947.9
|
Income From Equity
Method Investments
|
1.9
|
|
1.1
|
|
3.1
|
|
2.6
|
Income Tax
Expense
|
136.1
|
|
134.7
|
|
360.7
|
|
383.3
|
Income Before Income
Taxes and Income From Equity Method Investments
|
522.5
|
|
516.9
|
|
1,373.0
|
|
1,328.6
|
Interest
Expense
|
53.5
|
|
52.0
|
|
165.9
|
|
154.2
|
Interest
Income
|
15.2
|
|
22.9
|
|
80.9
|
|
42.2
|
Operating
Income
|
560.8
|
|
546.0
|
|
1,458.0
|
|
1,440.6
|
Add back: Amortization
of intangible assets
|
20.3
|
|
20.1
|
|
58.9
|
|
60.3
|
Earnings before
interest, taxes and amortization of intangible assets
("EBITA")
|
$
581.1
|
|
$
566.1
|
|
$
1,516.9
|
|
$
1,500.9
|
|
|
|
|
|
|
|
|
Real estate and other
repositioning costs
|
—
|
|
—
|
|
191.5
|
|
—
|
Charges arising from
the effects of the war in Ukraine
|
—
|
|
—
|
|
—
|
|
113.4
|
Gain on disposition of
subsidiary
|
—
|
|
—
|
|
(78.8)
|
|
—
|
EBITA -
Adjusted
|
$
581.1
|
|
$
566.1
|
|
$
1,629.6
|
|
$
1,614.3
|
|
|
|
|
|
|
|
|
Revenue
|
$
3,578.1
|
|
$
3,443.4
|
|
$
10,631.3
|
|
$
10,420.9
|
EBITA
|
$
581.1
|
|
$
566.1
|
|
$
1,516.9
|
|
$
1,500.9
|
EBITA Margin
%
|
16.2 %
|
|
16.4 %
|
|
14.3 %
|
|
14.4 %
|
EBITA -
Adjusted
|
$
581.1
|
|
$
566.1
|
|
$
1,629.6
|
|
$
1,614.3
|
EBITA Margin % -
Adjusted
|
16.2 %
|
|
16.4 %
|
|
15.3 %
|
|
15.5 %
|
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. The above
table also presents non-GAAP adjustments to EBITA to present EBITA-
Adjusted 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.
|
OMNICOM GROUP INC.
AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
(Unaudited)
|
(In
millions)
|
|
|
Three Months Ended September
30,
|
|
Reported
2023
|
|
Non-
GAAP
Adj.
|
|
Non-
GAAP
2023 Adj.
|
|
|
Reported
2022
|
|
Non-
GAAP
Adj.
|
|
Non-
GAAP
2022 Adj.
|
Revenue
|
$3,578.1
|
|
$
—
|
|
$ 3,578.1
|
|
|
$ 3,443.4
|
|
$
—
|
|
$ 3,443.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
3,017.3
|
|
—
|
|
3,017.3
|
|
|
2,897.4
|
|
—
|
|
2,897.4
|
Operating
Income
|
560.8
|
|
—
|
|
560.8
|
|
|
546.0
|
|
—
|
|
546.0
|
Operating Income Margin
%
|
15.7 %
|
|
|
|
15.7 %
|
|
|
15.9 %
|
|
|
|
15.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back: Amortization
of intangible assets
|
20.3
|
|
—
|
|
20.3
|
|
|
20.1
|
|
—
|
|
20.1
|
EBITA1
|
$
581.1
|
|
$
—
|
|
$
581.1
|
|
|
$
566.1
|
|
$
—
|
|
$
566.1
|
EBITA Margin
%1
|
16.2 %
|
|
|
|
16.2 %
|
|
|
16.4 %
|
|
|
|
16.4 %
|
|
|
Nine Months Ended September
30,
|
|
Reported
2023
|
|
Non-
GAAP
Adj. (2)
|
|
Non-
GAAP
2023 Adj.
|
|
|
Reported
2022
|
|
Non-
GAAP
Adj. (2)
|
|
Non-
GAAP
2022 Adj.
|
Revenue
|
$10,631.3
|
|
$
—
|
|
$
10,631.3
|
|
|
$
10,420.9
|
|
$
—
|
|
$
10,420.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses2
|
9,173.3
|
|
(112.7)
|
|
9,060.6
|
|
|
8,980.3
|
|
(113.4)
|
|
8,866.9
|
Operating
Income
|
1,458.0
|
|
112.7
|
|
1,570.7
|
|
|
1,440.6
|
|
113.4
|
|
1,554.0
|
Operating Income Margin
%
|
13.7 %
|
|
|
|
14.8 %
|
|
|
13.8 %
|
|
|
|
14.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back: Amortization
of intangible assets
|
58.9
|
|
—
|
|
58.9
|
|
|
60.3
|
|
—
|
|
60.3
|
EBITA1
|
$ 1,516.9
|
|
$
112.7
|
|
$ 1,629.6
|
|
|
$ 1,500.9
|
|
$
113.4
|
|
$ 1,614.3
|
EBITA Margin
%1
|
14.3 %
|
|
|
|
15.3 %
|
|
|
14.4 %
|
|
|
|
15.5 %
|
|
|
(1)
|
See Non-GAAP
reconciliation on page 8.
|
(2)
|
For the nine months
ended September 30, 2023, operating expenses included real estate
operating lease impairment charges, severance, and other exit costs
related to repositioning actions we took in the first and second
quarters of 2023 to reduce our real estate requirements, rebalance
our workforce, and consolidate operations in certain markets. In
addition, in the second quarter of 2023, we recorded a gain on
disposition of certain of our research businesses in the Execution
& Support discipline. There was no impact to Operating Income
for the three months ended September 30, 2023 from this
disposition. The net aggregate impact to Operating Income for the
nine months ended September 30, 2023 was a reduction of $112.7
million ($89.6 million after tax). The net aggregate effect of
these items in the nine months ended September 30, 2023 to diluted
net income per share - Omnicom Group Inc. was a decrease of
$0.44.
For the nine months ended September 30, 2022, operating
expenses included $113.4 million of charges recorded in the first
quarter of 2022 as well as an additional net income tax charge of
$4.8 million related to the disposition of our businesses in
Russia, which reduced net income - Omnicom Group Inc. by $118.2
million and diluted net income per share - Omnicom Group Inc. by
$0.57.
|
OMNICOM GROUP INC.
AND SUBSIDIARIES
|
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES
|
(Unaudited)
|
(In millions, except
per share amounts)
|
|
|
Three Months Ended September
30,
|
|
|
Nine Months Ended September
30,
|
|
2023
|
|
2022
|
|
|
2023
|
|
2022
|
Operating Income -
Reported
|
$
560.8
|
|
$
546.0
|
|
|
$
1,458.0
|
|
$
1,440.6
|
Real estate and other
repositioning costs
|
—
|
|
—
|
|
|
191.5
|
|
—
|
Charges arising from
the effects of the war in Ukraine
|
—
|
|
—
|
|
|
—
|
|
113.4
|
Gain on disposition of
subsidiary
|
—
|
|
—
|
|
|
(78.8)
|
|
—
|
Non-GAAP Operating
Income - Adjusted
|
$
560.8
|
|
$
546.0
|
|
|
$
1,570.7
|
|
$
1,554.0
|
|
Three Months Ended September
30,
|
|
Nine Months Ended September
30,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Income Tax Expense -
Reported
|
$
136.1
|
|
$
134.7
|
|
$
360.7
|
|
$
383.3
|
Income tax expense
related to:
|
|
|
|
|
|
|
|
Real estate and other
repositioning costs
|
—
|
|
—
|
|
46.0
|
|
—
|
Charges arising from
the effects of the war in
Ukraine
|
—
|
|
—
|
|
—
|
|
(4.8)
|
Gain on disposition of
subsidiary
|
—
|
|
—
|
|
(22.9)
|
|
—
|
Non-GAAP Income Tax
Expense- Adjusted
|
$
136.1
|
|
$
134.7
|
|
$
383.8
|
|
$
378.5
|
|
Three Months Ended
September 30,
|
|
|
Nine Months Ended
September 30,
|
|
2023
|
|
2022
|
|
|
2023
|
|
2022
|
|
Net
Income
|
Net
Income
per Share-
Diluted
|
|
Net
Income
|
Net Income
per Share-
Diluted
|
|
|
Net
Income
|
Net Income
per Share-
Diluted
|
|
Net
Income
|
Net Income
per Share-
Diluted
|
Net Income - Omnicom
Group
Inc. - Reported
|
$
371.9
|
$
1.86
|
|
$
364.5
|
$
1.77
|
|
|
$
965.7
|
$
4.78
|
|
$
886.7
|
$
4.27
|
Real estate and
other
repositioning costs
|
—
|
—
|
|
—
|
—
|
|
|
145.5
|
0.72
|
|
—
|
—
|
Charges arising from
the
effects of the war in Ukraine
|
—
|
—
|
|
—
|
—
|
|
|
—
|
—
|
|
118.2
|
0.57
|
Gain on disposition
of
subsidiary
|
—
|
—
|
|
—
|
—
|
|
|
(55.9)
|
(0.28)
|
|
—
|
—
|
Non-GAAP Net Income
-
Omnicom Group Inc. -
Adjusted1
|
$
371.9
|
$
1.86
|
|
$
364.5
|
$
1.77
|
|
|
$
1,055.3
|
$
5.22
|
|
$
1,004.9
|
$
4.84
|
|
|
(1)
|
Diluted Shares for the
three months ended September 30, 2023 and 2022 in millions were
199.9 and 206.3, respectively. Diluted Shares for the nine months
ended September 30, 2023 and 2022 in millions were 202.0 and 207.6,
respectively.
|
The above tables
reconcile GAAP financial measures of Operating Income, Income Tax
Expense, and Net Income-Omnicom Group Inc., to adjusted non-GAAP
financial measures of Non-GAAP Operating Income - Adjusted,
Non-GAAP Income Tax Expense - Adjusted, and Non-GAAP Net
Income-Omnicom Group Inc.-Adjusted for the periods presented.
Management believes excluding the charges arising from the effects
of the war in Ukraine, partially offset by a gain on the
disposition of a subsidiary, and repositioning costs provides
investors with a better picture of the performance of the business
during the periods presented.
|
View original
content:https://www.prnewswire.com/news-releases/omnicom-reports-third-quarter-2023-results-301959605.html
SOURCE Omnicom Group Inc.