2022 Fourth Quarter:
Revenue of $3,868.2 million, with organic
growth of 7.2%
Operating profit of $642.7 million
Operating profit margin of 16.6%
Diluted earnings per share of $2.09
NEW
YORK, Feb. 7, 2023 /PRNewswire/ -- Omnicom Group
Inc. (NYSE: OMC) today announced results for the quarter and full
year ended December 31, 2022.
"Fourth quarter organic revenue growth of 7.2% was stronger than
we expected, led by resilient performance across global geographies
and continued strength in our faster growing disciplines," said
John Wren, Chairman and Chief
Executive Officer of Omnicom Group Inc. "We enter 2023 in a very
strong position, building on last year's significant new business
wins and bringing together creativity, digital technology, and data
to create marketing solutions that are responsive to the business
transformation needs of our clients. At the same time, we are
closely tracking the macroeconomic outlook and are fully prepared
to respond appropriately. We are confident that the
flexibility and diversity of our business and the strength of our
balance sheet will continue to create value for our
shareholders."
Fourth Quarter 2022 Results
$ in millions,
except per share amounts
|
Three Months
Ended
December 31,
|
|
2022
|
|
|
2021
|
Revenue
|
$
3,868.2
|
|
|
$
3,855.9
|
Operating
Profit
|
642.7
|
|
|
622.5
|
Operating Profit
Margin
|
16.6 %
|
|
|
16.1 %
|
Interest expense,
net
|
25.9
|
|
|
44.4
|
Net Income
1
|
429.8
|
|
|
416.2
|
Net Income per Share -
Diluted 1
|
$
2.09
|
|
|
$
1.95
|
Notes: 1) Net Income
and Net Income per Share for Omnicom Group Inc.
|
Revenues
Worldwide revenue growth in the fourth
quarter of 2022 compared to the fourth quarter of 2021 was led by
an increase in revenue from organic growth of $276.8 million, or 7.2%. Acquisition
revenue, net of disposition revenue, decreased $53.5 million, or 1.4%, primarily reflecting the
disposition of our businesses in Russia in the first quarter of 2022. The
impact of foreign currency translation was a decrease of
$211.0 million, or 5.5%.
Reported total revenue in the fourth quarter of 2022 increased
$12.3 million, or 0.3%, to
$3,868.2 million.
Organic growth by discipline in the fourth quarter of 2022
compared to the fourth quarter of 2021 was as follows: 6.0% for
Advertising & Media, 11.6% for Precision Marketing, 12.7% for
Public Relations, 7.2% for Commerce & Brand Consulting, 6.4%
for Healthcare, and 17.0% for Experiential. Execution & Support
decreased 2.8%.
Organic growth by region in the fourth quarter of 2022 compared
to the fourth quarter of 2021 was as follows: 5.6% for the United States, 9.9% for the United Kingdom, 5.1% for the Euro Markets
& Other Europe, 6.9% for Asia
Pacific, 18.2% for Latin
America, 7.3% for Other North America, and 32.6% for the
Middle East & Africa.
Expenses
Operating expenses decreased $7.9 million, or 0.2%, to $3,225.5 million compared to the fourth quarter
of 2021. The weakening of most foreign currencies against the U.S.
Dollar reduced operating expenses in the quarter compared to prior
year in line with the percentage reduction from changes in foreign
currencies on revenue.
Salary and service costs, which tend to fluctuate with changes
in revenue, are comprised of salary and related costs, and
third-party service costs. Salary and service costs decreased
$0.1 million to $2,792.0 million. Salary and related costs
decreased $16.4 million, or 0.9%, to
$1,853.4 million as the increase
related to organic revenue growth and increased headcount was
offset by the effects of foreign currency translation. Third-party
service costs increased $16.3
million, or 1.8%, to $938.6
million primarily due to an increase in organic revenue.
Occupancy and other costs, which are less directly linked to
changes in revenue than salary and service costs, increased
$17.2 million, or 6.2%, to
$294.4 million, due to an increase in
general office expenses resulting from the return of our workforce
to the office, partially offset by lower rent.
SG&A expenses decreased $25.4
million to $84.5 million,
primarily due to lower professional fees, lower marketing related
costs, and reductions from the effects of foreign currency
translation.
Operating Profit
Operating profit increased
$20.2 million, or 3.2%, to
$642.7 million compared to the fourth
quarter of 2021. The related operating profit margin was
16.6% compared to 16.1% for the fourth quarter of 2021.
Interest Expense, net
Net interest expense in the
fourth quarter of 2022 decreased $18.5
million to $25.9 million
compared to the fourth quarter of 2021. Interest expense
increased $2.8 million to
$54.4 million, and interest income
increased $21.3 million to
$28.5 million, primarily as a result
of higher interest rates on cash balances and short-term
investments.
Income Taxes
Our effective tax rate of 26.5% in the
fourth quarter of 2022 increased from 23.1% in the fourth quarter
of 2021 primarily related to the favorable settlements of uncertain
tax positions in certain jurisdictions in the prior year
period.
Net Income – Omnicom Group Inc. and Diluted Net Income per
Share
Net income - Omnicom Group Inc. for the fourth quarter
of 2022 increased $13.6 million, or
3.3%, to $429.8 million compared to
the fourth quarter of 2021. Diluted shares outstanding
decreased to 205.2 million, or 3.8%, from 213.3 million as a result
of net share repurchases. Diluted net income per share of
$2.09 increased $0.14, or 7.2%, from $1.95 per share.
EBITA
EBITA increased $20.0
million, or 3.1%, to $662.7
million compared to the fourth quarter of 2021. The
related EBITA margin was 17.1% compared to 16.7% for the fourth
quarter of 2021.
Full Year 2022 Results
$ in millions,
except per share amounts
|
|
Twelve Months
Ended
December 31,
|
|
|
2022
|
|
|
2021
|
Revenue
|
|
$
14,289.1
|
|
|
$
14,289.4
|
Operating
Profit
|
|
2,083.3
|
|
|
2,197.9
|
Operating Profit
Margin
|
|
14.6 %
|
|
|
15.4 %
|
Interest expense,
net
|
|
137.9
|
|
|
209.1
|
Net Income
1
|
|
$
1,316.5
|
|
|
$
1,407.8
|
Net Income per Share -
Diluted 1
|
|
$
6.36
|
|
|
$
6.53
|
Adj. Operating Profit
2
|
|
$
2,196.7
|
|
|
$
2,147.4
|
Adj. Operating Profit
Margin 2
|
|
15.4 %
|
|
|
15.0 %
|
Adj. Net Income per
Share - Diluted 2
|
|
$
6.93
|
|
|
$
6.39
|
Notes: 1) Net Income
and Net Income per Share for Omnicom Group Inc. 2) See
Reconciliations of Non-GAAP Adjustments on pages
12-13.
|
Revenues
Worldwide revenue growth in 2022 compared to
2021 was led by an increase in revenue from organic growth of
$1,346.3 million, or 9.4%.
Acquisition revenue, net of disposition revenue, was a decrease of
$665.6 million, or 4.7%, primarily
reflecting dispositions in the Advertising & Media discipline
in the second quarter of 2021 and the disposition of our businesses
in Russia in the first quarter of
2022. The impact of foreign currency translation was a
decrease of $681.0 million, or
4.8%. Reported total revenue in 2022 decreased $0.3 million to $14,289.1
million.
Organic growth by discipline in 2022 compared to 2021 was as
follows: 7.3% for Advertising & Media, 17.1% for Precision
Marketing, 13.7% for Public Relations, 10.7% for Commerce &
Brand Consulting, 7.1% for Healthcare, 4.0% for Execution &
Support, and 26.1% for Experiential.
Organic growth by region in 2022 compared to 2021 was as
follows: 8.7% for the United
States, 10.9% for the United
Kingdom, 9.7% for the Euro Markets & Other Europe, 6.6%
for Asia Pacific, 14.1% for
Latin America, 9.2% for Other
North America, and 33.2% for the Middle
East & Africa.
Expenses
Operating expenses in 2022 increased
$114.3 million, or 0.9%, to
$12,205.8 million compared to 2021.
In 2022, operating expenses include charges arising from the
effects of the war in Ukraine of
$113.4 million. In 2021, operating
expenses were favorably impacted by a $50.5
million gain recorded in connection with dispositions in the
Advertising & Media discipline. The weakening of most foreign
currencies against the U.S. Dollar reduced operating expenses for
2022 as compared to the prior year in line with the percentage
reduction from changes in foreign currencies on revenue.
Salary and service costs, which tend to fluctuate with changes
in revenue, are comprised of salary and related costs, and
third-party service costs. In total, salary and service costs
decreased $76.1 million, or 0.7%, to
$10,325.9 million. Salary and
related costs increased $226.9
million, or 3.3%, to $7,197.9
million due to organic revenue growth and increased
headcount. Third-party service costs decreased $303.0 million, or 8.8%, to $3,128.0 million due primarily to dispositions in
the Advertising & Media discipline in the second quarter of
2021 and the disposition of our businesses in Russia in the first quarter of 2022.
Occupancy and other costs, which are less directly linked to
changes in revenue than salary and service costs, increased
$20.4 million, or 1.8%, to
$1,168.6 million, due to an increase
in general office expenses resulting from the return of our
workforce to the office, partially offset by lower rent and other
occupancy costs.
SG&A expenses decreased $1.2
million, or 0.3%, to $378.5
million.
Operating Profit
Operating profit in 2022 decreased
$114.6 million, or 5.2%, to
$2,083.3 million compared to
2021. The related operating profit margin was 14.6% in 2022
compared to 15.4% in 2021. Operating profit and operating
profit margin in 2022 include $113.4
million in charges related to the effects of the war in
Ukraine. Operating profit and
operating profit margin for 2021 were favorably impacted by the
$50.5 million gain recorded in
connection with dispositions in the Advertising & Media
discipline. Non-GAAP Adjusted operating profit increased 2.3%, and
the related margin increased to 15.4% from 15.0%.
Interest Expense, net
Net interest expense in 2022
decreased $71.2 million to
$137.9 million compared to
2021. Interest expense decreased $27.8
million to $208.6 million, and
interest income increased $43.4
million to $70.7 million,
primarily as a result of higher interest rates on cash balances and
short-term investments.
Income Taxes
Our effective tax rate of 28.1% in 2022
increased from 24.6% in 2021. The higher effective tax rate
for 2022 was primarily due to the result of the non-deductibility
of $113.4 million in charges recorded
in the first quarter of 2022 arising from the effects of the war in
Ukraine, as well as an additional
increase in income tax expense of $4.8
million related to the disposition of our businesses in
Russia. These charges were
partially offset by the tax benefit arising from our share-based
compensation awards. The effective tax rate for 2021 reflects a
nominal tax applied to the book gain on the disposition in the
Advertising & Media discipline resulting from the excess of tax
over book basis and a reduction in income tax expense of
$32.8 million primarily related to
the favorable settlements of uncertain tax positions in certain
jurisdictions.
Net Income – Omnicom Group Inc. and Diluted Net Income per
Share
Net income - Omnicom Group Inc. for 2022 decreased
$91.3 million, or 6.5%, to
$1,316.5 million compared to 2021.
Diluted shares outstanding decreased to 207.0 million, or 4.0%,
from 215.6 million as a result of net share repurchases.
Diluted net income per share of $6.36
decreased $0.17, or 2.6%, from
$6.53 per share. Non-GAAP
adjusted diluted earnings per share for 2022 increased 8.5% to
$6.93 from $6.39.
EBITA
EBITA decreased $114.3
million, or 5.0%, to $2,163.6
million compared to 2021. The related EBITA margin was
15.1% compared to 15.9% for 2021. EBITA and EBITA margin in
2022 include $113.4 million in
charges related to the effects of the war in Ukraine. Operating profit and operating profit
margin for 2021 were favorably impacted by the $50.5 million gain recorded in connection with
dispositions in the Advertising & Media discipline.
Risks and Uncertainties
Global economic challenges,
including the impact of the war in Ukraine, the COVID-19 pandemic, rising
inflation, rising interest rates and supply-chain disruptions could
cause economic uncertainty and volatility. The impact of these
issues on our business will vary by geographic market and
discipline. We monitor economic conditions closely, as well as
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, February 7, 2023 at
4:30 p.m. Eastern Time. Participants
can listen to the conference call by calling 844-291-6362
(domestic) or 234-720-6995 (international), along with access
code 1468163. 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 (csr.omnicomgroup.com) for highlights of our progress
across the four areas on which we focus: People, Community,
Environment and Governance.
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 offer services in advertising, strategic media
planning and buying, precision marketing, commerce and brand
consulting, 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. We use Adjusted Operating Profit, Adjusted Operating
Profit Margin, Adjusted EBITA, Adjusted EBITA Margin, Adjusted Net
Interest Expense, 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 allows for comparability
between reporting periods. EBITA, is defined as operating profit
before interest, taxes, and amortization of intangible assets and
EBITA margin, 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).
Non-GAAP financial measures should not be considered in isolation
from, or as a substitute for, financial information presented in
compliance 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 the war in Ukraine; the impact of the COVID-19 pandemic;
severe and sustained inflation in countries that comprise our major
markets; rising interest rates; 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 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 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. 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, 2021. Except as required under
applicable law, the Company does not assume any obligation to
update these forward-looking statements.
Omnicom Group
Inc. Consolidated Statements of Income Three
Months Ended December 31 (Unaudited)
(In Millions, Except Per Share
Data)
|
|
|
2022
|
|
2021
|
Revenue
|
$ 3,868.2
|
|
$ 3,855.9
|
Operating
Expenses:
|
|
|
|
Salary and service
costs
|
2,792.0
|
|
2,792.1
|
Occupancy and other
costs
|
294.4
|
|
277.2
|
Costs of
services
|
3,086.4
|
|
3,069.3
|
Selling, general and
administrative expenses
|
84.5
|
|
109.9
|
Depreciation and
amortization
|
54.6
|
|
54.2
|
|
3,225.5
|
|
3,233.4
|
Operating
Profit
|
642.7
|
|
622.5
|
Interest
Expense
|
54.4
|
|
51.6
|
Interest
Income
|
28.5
|
|
7.2
|
Income Before Income
Taxes and Income From Equity Method Investments
|
616.8
|
|
578.1
|
Income Tax
Expense
|
163.5
|
|
133.6
|
Income From Equity
Method Investments
|
2.6
|
|
5.4
|
Net Income
|
455.9
|
|
449.9
|
Net Income Attributed
To Noncontrolling Interests
|
26.1
|
|
33.7
|
Net Income -
Omnicom Group Inc.
|
$
429.8
|
|
$
416.2
|
|
|
|
|
Net Income Per Share -
Omnicom Group Inc.
|
|
|
|
Basic
|
$
2.11
|
|
$
1.96
|
Diluted
|
$
2.09
|
|
$
1.95
|
|
|
|
|
Weighted average
shares
|
|
|
|
Basic
|
203.9
|
|
212.2
|
Diluted
|
205.2
|
|
213.3
|
|
|
|
|
Dividends Declared Per
Common Share
|
$
0.70
|
|
$
0.70
|
Omnicom Group
Inc. Consolidated Statements of Income Twelve
Months Ended December 31 (Unaudited)
(In Millions, Except Per Share
Data)
|
|
|
2022
|
|
2021
|
Revenue
|
$
14,289.1
|
|
$
14,289.4
|
Operating
Expenses:
|
|
|
|
Salary and service
costs
|
10,325.9
|
|
10,402.0
|
Occupancy and other
costs
|
1,168.6
|
|
1,148.2
|
Charges arising from
the effects of the war in Ukraine
|
113.4
|
|
—
|
Gain on disposition of
subsidiary
|
—
|
|
(50.5)
|
Cost of
services
|
11,607.9
|
|
11,499.7
|
Selling, general and
administrative expenses
|
378.5
|
|
379.7
|
Depreciation and
amortization
|
219.4
|
|
212.1
|
|
12,205.8
|
|
12,091.5
|
Operating
Profit
|
2,083.3
|
|
2,197.9
|
Interest
Expense
|
208.6
|
|
236.4
|
Interest
Income
|
70.7
|
|
27.3
|
Income Before Income
Taxes and Income From Equity Method Investments
|
1,945.4
|
|
1,988.8
|
Income Tax
Expense
|
546.8
|
|
488.7
|
Income From Equity
Method Investments
|
5.2
|
|
7.5
|
Net Income
|
1,403.8
|
|
1,507.6
|
Net Income Attributed
To Noncontrolling Interests
|
87.3
|
|
99.8
|
Net Income - Omnicom
Group Inc.
|
$ 1,316.5
|
|
$ 1,407.8
|
|
|
|
|
Net Income Per Share -
Omnicom Group Inc.
|
|
|
|
Basic
|
$6.40
|
|
$6.57
|
Diluted
|
$6.36
|
|
$6.53
|
|
|
|
|
Weighted average
shares
|
|
|
|
Basic
|
205.6
|
|
214.3
|
Diluted
|
207.0
|
|
215.6
|
|
|
|
|
Dividends Declared Per
Common Share
|
$2.80
|
|
$2.80
|
Omnicom Group
Inc. Detail of Operating Expenses Three Months
Ended December 31 (Unaudited)
(In Millions)
|
|
|
2022
|
|
2021
|
Operating
Expenses:
|
|
|
|
Salary and service
costs
|
|
|
|
Salary and related
service costs
|
$ 1,853.4
|
|
$ 1,869.8
|
Third-party service
costs
|
938.6
|
|
922.3
|
|
2,792.0
|
|
2,792.1
|
Occupancy and other
costs
|
294.4
|
|
277.2
|
Costs of
services
|
3,086.4
|
|
3,069.3
|
Selling, general and
administrative expenses
|
84.5
|
|
109.9
|
Depreciation and
amortization
|
54.6
|
|
54.2
|
Total Operating
Expenses
|
$ 3,225.5
|
|
$ 3,233.4
|
Omnicom Group
Inc. Detail of Operating Expenses Twelve Months
Ended December 31 (Unaudited)
(In Millions)
|
|
|
2022
|
|
2021
|
Operating
Expenses:
|
|
|
|
Salary and service
costs
|
|
|
|
Salary and related
service costs
|
$ 7,197.9
|
|
$ 6,971.0
|
Third-party service
costs
|
3,128.0
|
|
3,431.0
|
|
10,325.9
|
|
10,402.0
|
Occupancy and other
costs
|
1,168.6
|
|
1,148.2
|
Charges arising from
the effects of the war
in
Ukraine
|
113.4
|
|
—
|
Gain on sale of
subsidiary
|
—
|
|
(50.5)
|
Cost of services
|
11,607.9
|
|
11,499.7
|
Selling, general and
administrative expenses
|
378.5
|
|
379.7
|
Depreciation and
amortization
|
219.4
|
|
212.1
|
Total Operating
Expenses
|
$
12,205.8
|
|
$
12,091.5
|
Omnicom Group
Inc. Reconciliation of Non-GAAP Financial
Measures Three Months Ended
December 31 (Unaudited)
(In Millions)
|
|
|
2022
|
|
2021
|
Net Income -
Omnicom Group Inc.
|
$
429.8
|
|
$
416.2
|
Net Income Attributed
To Noncontrolling Interests
|
26.1
|
|
33.7
|
Net Income
|
455.9
|
|
449.9
|
Income From Equity
Method Investments
|
2.6
|
|
5.4
|
Income Tax
Expense
|
163.5
|
|
133.6
|
Income Before Income
Taxes and Income From Equity Method Investments
|
616.8
|
|
578.1
|
Interest
Income
|
28.5
|
|
7.2
|
Interest
Expense
|
54.4
|
|
51.6
|
Operating
Profit
|
642.7
|
|
622.5
|
Add back: Amortization
of intangible assets
|
20.0
|
|
20.2
|
Earnings before
interest, taxes and amortization of intangible assets
("EBITA")
|
$
662.7
|
|
$
642.7
|
|
|
|
|
Revenue
|
$
3,868.2
|
|
$ 3,855.9
|
EBITA
|
$
662.7
|
|
$
642.7
|
EBITA Margin
%
|
17.1 %
|
|
16.7 %
|
|
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.
|
Omnicom Group
Inc. Reconciliation of Non-GAAP Financial
Measures Twelve Months Ended
December 31 (Unaudited)
(In Millions)
|
|
|
2022
|
|
2021
|
Net Income - Omnicom
Group Inc.
|
$
1,316.5
|
|
$ 1,407.8
|
Net Income Attributed
To Noncontrolling Interests
|
87.3
|
|
99.8
|
Net Income
|
1,403.8
|
|
1,507.6
|
Income From Equity
Method Investments
|
5.2
|
|
7.5
|
Income Tax
Expense
|
546.8
|
|
488.7
|
Income Before Income
Taxes and Income From Equity Method Investments
|
1,945.4
|
|
1,988.8
|
Interest
Expense
|
208.6
|
|
236.4
|
Interest
Income
|
70.7
|
|
27.3
|
Operating
Profit
|
2,083.3
|
|
2,197.9
|
Add back: Amortization
of intangible assets
|
80.3
|
|
80.0
|
Earnings before
interest, taxes and amortization of intangible assets
("EBITA")
|
$
2,163.6
|
|
$ 2,277.9
|
|
|
|
|
Revenue
|
$
14,289.1
|
|
$
14,289.4
|
EBITA
|
$
2,163.6
|
|
$ 2,277.9
|
EBITA Margin
%
|
15.1 %
|
|
15.9 %
|
|
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.
|
Omnicom Group
Inc. Reconciliation of Non-GAAP
Adjustments Twelve Months Ended December
31 (Unaudited) (In
Millions)
|
|
|
|
Full Year
|
|
|
Reported
2022
|
Non-GAAP
Adjustments
|
Non-GAAP
Adjusted 2022
|
|
Reported
2021
|
Non-GAAP
Adjustments
|
Non-GAAP
Adjusted 2021
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$ 14,289.1
|
$
—
|
$
14,289.1
|
|
$ 14,289.4
|
$
—
|
$
14,289.4
|
Operating
Expenses(a)(c)
|
|
12,205.8
|
(113.4)
|
12,092.4
|
|
12,091.5
|
50.5
|
12,142.0
|
Operating
Profit
|
|
2,083.3
|
113.4
|
2,196.7
|
|
2,197.9
|
(50.5)
|
2,147.4
|
Operating Margin
%
|
|
14.6 %
|
|
15.4 %
|
|
15.4 %
|
|
15.0 %
|
|
|
|
|
|
|
|
|
|
Net Interest
Expense(b)
|
|
137.9
|
—
|
137.9
|
|
209.1
|
(26.6)
|
182.5
|
Income Tax
Expense(b)(c)
|
|
546.8
|
(4.8)
|
542.0
|
|
488.7
|
7.1
|
495.8
|
Income from Equity
Method Investments
|
|
5.2
|
—
|
5.2
|
|
7.5
|
—
|
7.5
|
Net Income Attributed
to Noncontrolling Interests
|
|
87.3
|
—
|
87.3
|
|
99.8
|
—
|
99.8
|
|
|
|
|
|
|
|
|
|
Net Income - Omnicom
Group Inc.(c)(d)
|
|
$ 1,316.5
|
$
118.2
|
$ 1,434.7
|
|
$
1,407.8
|
$
(31.0)
|
$ 1,376.8
|
|
|
|
|
|
|
|
|
|
Diluted
Shares
|
|
207.0
|
—
|
207.0
|
|
215.6
|
—
|
215.6
|
|
|
|
|
|
|
|
|
|
Net Income per Share -
Diluted(d)
|
|
$
6.36
|
$
0.57
|
$
6.93
|
|
$
6.53
|
$
(0.14)
|
$
6.39
|
|
|
|
|
|
|
|
|
|
Dividends Declared Per
Common Share
|
|
$
2.80
|
$
—
|
$
2.80
|
|
$
2.80
|
$
—
|
$
2.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Full Year 2021
Operating expenses and Net Income - Omnicom Group Inc. include
$50.5 million related to a gain on the disposition of a subsidiary
in the second quarter of 2021.
|
(b)
|
Full Year 2021 Net
interest expense includes a $26.6 million pre-tax charge ($19.5
million after-tax) on the early extinguishment of debt in the
second quarter of 2021.
|
(c)
|
In the first quarter of
2022, we recorded a pre-tax charge of $113.4 million in Operating
Expenses related to the effects of the war in Ukraine, resulting in
an additional $4.8 million of Income tax expense.
|
(d)
|
The combined effect of
the after-tax gain from the disposition in the Advertising &
Media discipline and the loss on the early redemption of the 2022
Notes increased Net income - Omnicom Group Inc. for 2021 by $31.0
million and Net Income per Share- Diluted by $0.14.
|
|
|
The above table
reconciles the nearest U.S. GAAP financial measures to Non-GAAP
Adjusted financial measures. We believe Non-GAAP Adjusted
financial measures are useful for investors to evaluate the
performance of our business.
|
View original
content:https://www.prnewswire.com/news-releases/omnicom-group-reports-fourth-quarter-and-full-year-2022-results-301741220.html
SOURCE Omnicom Group Inc.