NEW YORK, July 28, 2020 /PRNewswire/ -- Omnicom Group Inc.
(NYSE: OMC) today announced a net loss - Omnicom Group Inc. for the
second quarter of 2020 of $24.2
million compared to net income - Omnicom Group Inc. of
$370.7 million in the second quarter
of 2019. Diluted net loss per share for the second quarter of 2020
was $0.11 per share compared to
diluted net income per share of $1.68
for the second quarter of 2019.
Net loss - Omnicom Group Inc. and diluted net loss per share -
Omnicom Group Inc. in the second quarter of 2020 included a net
after-tax decrease of $223.1 million
and $1.03 per share, respectively, as
a result of repositioning costs and a net loss on dispositions
during the quarter, as discussed further below.
Adjusting for the impact of those items, net income - Omnicom
Group Inc. for the second quarter of 2020 would have decreased
$171.8 million, or 46.3%, to
$198.9 million compared to
$370.7 million in the second quarter
of 2019 and diluted net income per share - Omnicom Group Inc. would
have decreased $0.76, or 45.2%, to
$0.92 per share compared to
$1.68 for the second quarter of
2019.
Primarily due to the negative effects on our revenue arising
from the coronavirus disease 2019 ("COVID-19") pandemic, Omnicom's
worldwide revenue in the second quarter of 2020 decreased 24.7% to
$2,800.7 million from $3,719.8 million in the second quarter of 2019.
The components of the change in revenue included a decrease in
revenue from the negative impact of foreign currency translation of
1.7%, a decrease in acquisition revenue, net of disposition revenue
of 0.1% and a decrease in revenue from negative organic growth of
23.0% when compared to the second quarter of 2019.
Organic growth in the second quarter of 2020 as compared to the
second quarter of 2019 in our five fundamental disciplines was as
follows: Advertising decreased 26.6%, CRM Consumer Experience
decreased 25.6%, CRM Execution & Support
decreased 27.6%, Public Relations decreased 13.9% and
Healthcare increased 3.2%.
Across our regional markets, organic growth in the second
quarter of 2020 as compared to the second quarter of 2019 was as
follows: the United States
decreased 20.7%, Other North America decreased 29.6%, the
United Kingdom decreased 23.7%,
the Euro Markets & Other Europe decreased 29.4%, Asia Pacific decreased 18.6%, Latin
America decreased 24.1% and the Middle
East & Africa decreased
39.4%.
Operating profit in the second quarter of 2020 included a
pre-tax decrease of $277.9 million
due to repositioning costs, 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. Operating profit
decreased $511.2 million, or 89.1%,
to $62.5 million compared to
$573.7 million during the second
quarter of 2019. Our operating margin for the second quarter
of 2020 decreased to 2.2% versus 15.4% for the second quarter of
2019.
Adjusting for the impact of the repositioning actions and net
loss on dispositions discussed above, operating profit in the
second quarter of 2020 would have decreased $233.3 million, or 40.7%, to $340.4 million from $573.7
million in the second quarter of 2019, while operating
margin for the second quarter of 2020 would have decreased to 12.2%
when compared to 15.4% for the second quarter of 2019.
For the second quarter of 2020, our effective income tax rate
increased period-over-period to 143.1% from 24.9%. The increase was
primarily attributable to the non-deductibility in certain
jurisdictions of a portion of the repositioning costs and loss on
dispositions. In the second quarter of 2019, income tax expense was
reduced by $10.8 million primarily
from the net favorable settlements of uncertain tax positions in
certain jurisdictions. The non-deductibility of a portion of the
repositioning costs and loss on dispositions in certain
jurisdictions with lower effective tax rates resulted in a lower
tax benefit, which had the effect of increasing our second quarter
2020 effective tax rate from 26.2% to 143.1%.
Year-to-Date
Net income - Omnicom Group Inc. for the six months ended
June 30, 2020 decreased $399.9
million, or 63.1%, to $234.0 million compared to
$633.9 million in the same period in
2019. Diluted net income per share - Omnicom Group Inc. for
the six months ended June 30, 2020 decreased $1.77, or 62.1%, to $1.08 per share compared to $2.85 per share for the six months ended
June 30, 2019.
Net income - Omnicom Group Inc. and diluted net income per share
- Omnicom Group Inc. for the six months ended June 30, 2020
included a net after-tax decrease of $223.1
million and $1.03 per share,
respectively, as a result of repositioning costs and a net loss on
dispositions during the second quarter of 2020, as previously
discussed above.
Adjusting for the impact of those items, net income - Omnicom
Group Inc. for the six months ended June 30, 2020 would have
decreased $176.8 million, or 27.9%,
to $457.1 million compared to
$633.9 million in the same period in
2019, and diluted net income per share - Omnicom Group Inc. would
have decreased $0.74, or 26.0%, to
$2.11 per share compared to
$2.85 per share for the six months
ended June 30, 2019.
Primarily due to the negative effects on our revenue arising
from the COVID-19 pandemic in the second quarter of 2020, worldwide
revenue for the six months ended June 30, 2020 decreased 13.6%
to $6,207.6 million from $7,188.7 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 1.6%, a decrease in acquisition revenue, net of
disposition revenue of 0.4% and a decrease in revenue from negative
organic growth of 11.7% when compared to the same period of
2019.
Organic growth for the six months ended June 30, 2020
compared to the same period in 2019 in our five fundamental
disciplines was as follows: Advertising decreased 13.9%, CRM
Consumer Experience decreased 14.0%, CRM Execution & Support
decreased 13.7%, Public Relations decreased 7.0% and Healthcare
increased 6.2%.
Across our regional markets, organic growth for the six months
ended June 30, 2020 as compared to the same period of 2019 was
as follows: the United States
decreased 9.8%, Other North America decreased 15.1%, the
United Kingdom decreased 10.4%,
the Euro Markets & Other Europe decreased 16.6%, Asia Pacific decreased 8.9%, Latin America decreased 15.0% and the
Middle East & Africa decreased 33.2%.
Operating profit for the six months ended June 30, 2020
included a pre-tax decrease of $277.9
million due to repositioning costs, 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. Operating
profit decreased $519.9 million, or 51.9%, to $482.7 million from $1,002.6 million for the six months ended
June 30, 2019. Our operating margin for the six months ended
June 30, 2020 decreased to 7.8% versus 13.9% for the same
period of 2019.
Adjusting for the impact of the repositioning actions and net
loss on dispositions discussed above, operating profit for the six
months ended June 30, 2020 would have decreased $242.0 million, or 24.1%, to $760.6 million from $1,002.6 million for the six months ended
June 30, 2019, while operating margin during the period would
have decreased to 12.3% versus 13.9% for the same period of
2019.
Our effective tax rate for the six months ended June 30,
2020 increased period-over-period to 30.6% from 25.7%. The increase
was primarily attributable to the non-deductibility in certain
jurisdictions of a portion of the repositioning costs and loss on
dispositions. In the same period of 2019, income tax expense was
reduced by $10.8 million primarily
from the net favorable settlements of uncertain tax positions in
certain jurisdictions. The non-deductibility of a portion of the
repositioning costs and loss on dispositions in certain
jurisdictions with lower effective tax rates resulted in a lower
tax benefit, which had the effect of increasing our effective tax
rate for the six months ended June 30, 2020 from 26.1% to
30.6%.
Non-GAAP Financial Measures
We use certain non-GAAP financial measures in describing our
performance. Non-GAAP 2020 Adjusted results, which exclude the
impact of repositioning actions taken and a net loss on the
disposition of certain subsidiaries in the second quarter of 2020,
are presented in the second quarter and year-to-date results
presented above and in the tables in this release. We believe that
the Non-GAAP 2020 Adjusted results are useful measures for
investors to understand the impact these actions had on our
reported results.
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 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 during the second quarter of 2020 and is expected to
continue for the remainder of the year. 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
immediately and more significantly than others, including travel,
lodging and entertainment, energy and oil and gas, non-essential
retail and automotive. Clients in these industries have already
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 actions were taken to tailor their services
and capabilities to changes in client demand.
As we previously reported, in March
2020 and early in the second quarter of 2020, we have taken
numerous proactive steps to strengthen our liquidity and financial
position over the past several months that we expect will help
mitigate the potential impacts of COVID-19, including:
- The amendment and extension of our $2.5
billion credit facility to February
2025,
- The suspension of our share repurchase program,
- The issuance in February of $600
million 10-year 2.45% Senior Notes, which were used to
finance the early redemption of the remaining $600 million of 4.45% Senior Notes that were due
in August 2020,
- The issuance in early April of an additional $600 million 10-year 4.20% Senior Notes, and
- The completion in early April, of a $400
million 364-day revolving credit facility, which is in
addition to our existing $2.5 billion
revolving credit facility that expires in February 2025.
We have no long-term debt maturing until May 2022.
Definitions - Components of Revenue Change
We use certain terms in describing the components of the change
in revenue above.
Foreign exchange rate impact: calculated by translating the
current period's local currency revenue using the prior period
average exchange rates to derive current period constant currency
revenue. The foreign exchange rate impact is the difference between
the current period revenue in U.S. Dollars and the current period
constant currency revenue.
Acquisition revenue, net of disposition revenue: Acquisition
revenue is calculated as if the acquisition occurred twelve months
prior to the acquisition date by aggregating the comparable prior
period revenue of acquisitions through the acquisition date. As a
result, acquisition revenue excludes the positive or negative
difference between our current period revenue subsequent to the
acquisition date and the comparable prior period revenue and the
positive or negative growth after the acquisition date is
attributed to organic growth. Disposition revenue is calculated as
if the disposition occurred twelve months prior to the disposition
date by aggregating the comparable prior period revenue of
disposals through the disposition date. The acquisition revenue and
disposition revenue amounts are netted in the description
above.
Organic growth: calculated by subtracting the foreign exchange
rate impact component and the acquisition revenue, net of
disposition revenue component from total revenue growth.
Forward-looking Statements
Certain statements in this press release related to the
potential impact of the COVID-19 outbreak constitute
forward-looking statements, including statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These
statements may discuss goals, intentions and expectations as to
future plans, trends, events, results of operations or financial
condition, or otherwise, based on current beliefs of the Company's
management as well as assumptions made by, and information
currently available to, the Company's management. Forward-looking
statements may be accompanied by words such as "aim," "anticipate,"
"believe," "plan," "could," "should," "would," "estimate,"
"expect," "forecast," "future," "guidance," "intend," "may,"
"will," "possible," "potential," "predict," "project" or similar
words, phrases or expressions.
Forward-looking statements are subject to various risks and
uncertainties, many of which are outside the Company's control.
Therefore, you should not place undue reliance on such statements.
You should carefully consider this and the other risks and
uncertainties that may affect the Company's business, including
those described in Item 1A, "Risk Factors" and Item 7,
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our Annual Report on Form 10-K for the
year ended December 31, 2019 and other documents filed from
time to time with the Securities and Exchange Commission. Except as
required under applicable law, the Company does not assume any
obligation to update these forward-looking statements.
Conference Call
Omnicom will host a conference call to review the second quarter
financial results on Tuesday, July 28,
2020 at 8:30 a.m. EDT.
Participants can listen to the conference call by dialing (844)
721-7239 (domestic) or (409) 207-6953 (international), along with
access code 5962009. The call will also be simulcast and archived
on our website at:
http://investor.omnicomgroup.com/investor-relations/news-events-and-filings.
About Omnicom Group Inc.
Omnicom Group Inc. (NYSE: OMC) (www.omnicomgroup.com) is a
leading global marketing and corporate communications
company. Omnicom's branded networks and numerous specialty
firms provide advertising, strategic media planning and buying,
digital and interactive marketing, direct and promotional
marketing, public relations and other specialty communications
services to over 5,000 clients in more than 70 countries.
Follow us on Twitter for the latest news.
|
Omnicom Group
Inc.
Consolidated Statements of Income
Three
Months Ended June 30
(Unaudited)
(Dollars in Millions, Except Per Share Data)
|
|
|
2020
(a)
|
|
2019
|
|
|
|
|
|
Revenue
|
$
|
2,800.7
|
|
|
$
|
3,719.8
|
|
|
Operating
Expenses:
|
|
|
|
|
Salary and service
costs
|
2,031.1
|
|
|
2,665.2
|
|
|
Occupancy and other
costs
|
290.0
|
|
|
315.4
|
|
|
Repositioning costs
and net loss on dispositions
|
277.9
|
|
|
—
|
|
|
Costs of
services
|
2,599.0
|
|
|
2,980.6
|
|
|
Selling, general and
administrative expenses
|
82.1
|
|
|
107.7
|
|
|
Depreciation and
amortization
|
57.1
|
|
|
57.8
|
|
|
2,738.2
|
|
|
3,146.1
|
|
|
Operating
Profit
|
62.5
|
|
|
573.7
|
|
|
Interest
Expense
|
53.7
|
|
|
66.6
|
|
|
Interest
Income
|
6.5
|
|
|
16.4
|
|
|
Income Before Income
Taxes
|
15.3
|
|
|
523.5
|
|
|
Income Tax
Expense
|
21.9
|
|
|
130.6
|
|
|
Income (Loss) From
Equity Method Investments
|
(7.8)
|
|
|
1.2
|
|
|
Net Income
(Loss)
|
(14.4)
|
|
|
394.1
|
|
|
Net Income (Loss)
Attributed To Noncontrolling Interests
|
9.8
|
|
|
23.4
|
|
|
Net Income (Loss) -
Omnicom Group Inc.
|
$
|
(24.2)
|
|
|
$
|
370.7
|
|
|
|
|
|
|
Net Income (Loss) Per
Share - Omnicom Group Inc.
|
|
|
|
|
Basic
|
$
|
(0.11)
|
|
|
$
|
1.69
|
|
|
Diluted
|
$
|
(0.11)
|
|
|
$
|
1.68
|
|
|
|
|
|
|
Weighted average
shares (in millions)
|
|
|
|
|
Basic
|
214.9
|
|
|
219.6
|
|
|
Diluted
|
215.4
|
|
|
220.9
|
|
|
|
|
|
|
Dividends Declared
Per Common Share
|
$
|
0.65
|
|
|
$
|
0.65
|
|
|
|
|
(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 net impact of these items decreased
Operating Profit by $277.9 million, Net Income - Omnicom Group Inc.
by $223.1 million and Diluted Net Income Per Share - Omnicom Group
Inc. $1.03 per share for the three months ended June 30,
2020. Additional information regarding the realignment
actions and net loss on dispositions are presented in the tables
below.
|
|
Omnicom Group
Inc.
Consolidated Statements of Income
Six
Months Ended June 30
(Unaudited)
(Dollars in Millions, Except Per Share Data)
|
|
|
2020
(a)
|
|
2019
|
|
|
|
|
|
Revenue
|
$
|
6,207.6
|
|
|
$
|
7,188.7
|
|
|
Operating
Expenses:
|
|
|
|
|
Salary and service
costs
|
4,564.4
|
|
|
5,232.8
|
|
|
Occupancy and other
costs
|
599.6
|
|
|
624.7
|
|
|
Repositioning costs
and net loss on dispositions
|
277.9
|
|
|
—
|
|
|
Costs of
services
|
5,441.9
|
|
|
5,857.5
|
|
|
Selling, general and
administrative expenses
|
168.9
|
|
|
211.2
|
|
|
Depreciation and
amortization
|
114.1
|
|
|
117.4
|
|
|
5,724.9
|
|
|
6,186.1
|
|
|
Operating
Profit
|
482.7
|
|
|
1,002.6
|
|
|
Interest
Expense
|
112.2
|
|
|
129.6
|
|
|
Interest
Income
|
19.2
|
|
|
33.4
|
|
|
Income Before Income
Taxes
|
389.7
|
|
|
906.4
|
|
|
Income Tax
Expense
|
119.3
|
|
|
233.2
|
|
|
Income (Loss) From
Equity Method Investments
|
(13.0)
|
|
|
0.7
|
|
|
Net Income
|
257.4
|
|
|
673.9
|
|
|
Net Income Attributed
To Noncontrolling Interests
|
23.4
|
|
|
40.0
|
|
|
Net Income - Omnicom
Group Inc.
|
$
|
234.0
|
|
|
$
|
633.9
|
|
|
|
|
|
|
Net Income Per Share
- Omnicom Group Inc.
|
|
|
|
|
Basic
|
$
|
1.08
|
|
|
$
|
2.86
|
|
|
Diluted
|
$
|
1.08
|
|
|
$
|
2.85
|
|
|
|
|
|
|
Weighted average
shares (in millions)
|
|
|
|
|
Basic
|
215.8
|
|
|
221.4
|
|
|
Diluted
|
216.5
|
|
|
222.5
|
|
|
|
|
|
|
Dividends Declared
Per Common Share
|
$
|
1.30
|
|
|
$
|
1.30
|
|
|
|
|
(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 net impact of these items decreased
Operating Profit by $277.9 million, Net Income - Omnicom Group Inc.
by $223.1 million and Diluted Net Income Per Share - Omnicom Group
Inc. $1.03 per share for the six months ended June 30, 2020.
Additional information regarding the net gain and repositioning
actions are presented in the tables below.
|
|
Omnicom Group
Inc.
Detail of Operating Expenses
Three Months
Ended June 30
(Unaudited)
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
Salary and service
costs
|
|
|
|
|
Salary and related
service costs
|
$
|
1,424.7
|
|
|
$
|
1,660.2
|
|
|
Third-party service
costs
|
606.4
|
|
|
1,005.0
|
|
|
Occupancy and other
costs
|
290.0
|
|
|
315.4
|
|
|
Repositioning costs
and net loss on dispositions
|
277.9
|
|
|
—
|
|
|
Costs of
services
|
2,599.0
|
|
|
2,980.6
|
|
|
Selling, general and
administrative expenses
|
82.1
|
|
|
107.7
|
|
|
Depreciation and
amortization
|
57.1
|
|
|
57.8
|
|
|
Total Operating
Expenses
|
$
|
2,738.2
|
|
|
$
|
3,146.1
|
|
|
Omnicom Group
Inc.
Detail of Operating Expenses
Six Months
Ended June 30
(Unaudited)
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
Salary and service
costs
|
|
|
|
|
Salary and related
service costs
|
$
|
3,067.1
|
|
|
$
|
3,326.2
|
|
|
Third-party service
costs
|
1,497.3
|
|
|
1,906.6
|
|
|
Occupancy and other
costs
|
599.6
|
|
|
624.7
|
|
|
Repositioning costs
and net loss on dispositions
|
277.9
|
|
|
—
|
|
|
Costs of
services
|
5,441.9
|
|
|
5,857.5
|
|
|
Selling, general and
administrative expenses
|
168.9
|
|
|
211.2
|
|
|
Depreciation and
amortization
|
114.1
|
|
|
117.4
|
|
|
Total Operating
Expenses
|
$
|
5,724.9
|
|
|
$
|
6,186.1
|
|
|
Omnicom Group
Inc.
Impact of Second Quarter 2020 Repositioning Actions
and Net Loss on Dispositions
Three and Six Months Ended
June 30, 2020
(Unaudited)
(Dollars in Millions)
|
|
|
Severance
Actions
|
Real Estate
Actions
|
Net Loss on
Dispositions
|
|
Total
|
|
|
|
|
|
|
|
Operating Expenses
(a):
|
|
|
|
|
|
|
Salary and service
costs
|
|
|
|
|
|
|
Salary and related
costs
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Third party
costs
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
Occupancy and other
costs
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
Repositioning costs
and net loss on
dispositions
|
150.0
|
|
102.8
|
|
25.1
|
|
|
277.9
|
|
|
Costs of
services
|
150.0
|
|
102.8
|
|
25.1
|
|
|
277.9
|
|
|
Selling, general and
administrative expenses
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
Depreciation and
amortization
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
Operating
Expenses
|
$
|
150.0
|
|
$
|
102.8
|
|
$
|
25.1
|
|
|
$
|
277.9
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The above table
identifies the pre-tax impact of recorded expenses for certain
repositioning actions related to the realignment of our businesses
in reaction to the COVID-19 pandemic and a net loss on the
disposition of certain subsidiaries during the second quarter of
2020 on the components of our operating expenses for the three and
six months ended June 30, 2020. The expenses included
incremental severance charges, right-of-use asset impairments and
other real estate costs and a net loss on the disposition of
certain subsidiaries and other charges.
|
|
Omnicom Group
Inc.
Non-GAAP Financial Measures - Adjusted for the
Impact of Second Quarter 2020
Repositioning Actions and Net Loss on Dispositions
Three
Months Ended June 30, 2020
(Unaudited)
(Dollars in Millions, Except Per Share Data)
|
|
|
2020 (a)
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
2020
Adjusted
|
|
|
|
|
|
|
|
Operating
Profit
|
$
|
62.5
|
|
|
$
|
277.9
|
|
|
$
|
340.4
|
|
|
Net Interest
Expense
|
47.2
|
|
|
—
|
|
|
47.2
|
|
|
Income Tax
Expense
|
21.9
|
|
|
54.8
|
|
|
76.7
|
|
|
Income (Loss) From
Equity Method Investments
|
(7.8)
|
|
|
—
|
|
|
(7.8)
|
|
|
Net Income (Loss)
Attributed To Noncontrolling Interests
|
9.8
|
|
|
—
|
|
|
9.8
|
|
|
Net Income (Loss) -
Omnicom Group Inc.
|
$
|
(24.2)
|
|
|
$
|
223.1
|
|
|
$
|
198.9
|
|
|
|
|
|
|
|
|
Diluted Net Income
(Loss) Per Share - Omnicom Group Inc.
|
$
|
(0.11)
|
|
|
$
|
1.03
|
|
|
$
|
0.92
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares (in millions)
|
215.4
|
|
|
215.4
|
|
|
215.4
|
|
|
|
The above table
presents the U.S. GAAP financial measures of Operating Profit,
Income Tax Expense, Net Income (Loss) - Omnicom Group Inc. and
Diluted Net Income (Loss) Per Share - Omnicom Group Inc., as well
as the impact certain repositioning actions and of the net loss
recognized on dispositions of certain subsidiaries which were
recorded in the second quarter of 2020, for the three months ended
June 30, 2020. The amounts presented in the column "Non-GAAP
2020 Adjusted" excludes these items from our results for the period
presented, which are non-GAAP operating performance measures. We
believe that the amounts excluding the impact of these items are
useful measures for investors to understand the impact these items
had on our reported results. 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.
|
|
|
(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 net impact of these items
decreased Operating Profit by $277.9 million, Net Income - Omnicom
Group Inc. by $223.1 million and Diluted Net Income Per Share -
Omnicom Group Inc. $1.03 per share for the three months ended
June 30, 2020.
|
|
Omnicom Group
Inc.
Non-GAAP Financial Measures - Adjusted for the
Impact of Second Quarter 2020
Repositioning Actions and Net Loss on Dispositions
Three
Months Ended June 30
(Unaudited)
(Dollars in Millions, Except Per Share Data)
|
|
|
2020 (a)
|
|
Non-GAAP
2020
Adjusted
|
|
2019
|
|
|
|
|
|
|
|
Operating
Profit
|
$
|
62.5
|
|
|
$
|
340.4
|
|
|
$
|
573.7
|
|
|
Net Interest
Expense
|
47.2
|
|
|
47.2
|
|
|
50.2
|
|
|
Income Tax
Expense
|
21.9
|
|
|
76.7
|
|
|
130.6
|
|
|
Income (Loss) From
Equity Method Investments
|
(7.8)
|
|
|
(7.8)
|
|
|
1.2
|
|
|
Net Income (Loss)
Attributed To Noncontrolling
Interests
|
9.8
|
|
|
9.8
|
|
|
23.4
|
|
|
Net Income (Loss) -
Omnicom Group Inc.
|
$
|
(24.2)
|
|
|
$
|
198.9
|
|
|
$
|
370.7
|
|
|
|
|
|
|
|
|
Diluted Net Income
(Loss) Per Share - Omnicom
Group Inc.
|
$
|
(0.11)
|
|
|
$
|
0.92
|
|
|
$
|
1.68
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares (in millions)
|
215.4
|
|
|
215.4
|
|
|
220.9
|
|
|
|
The above table
identifies the U.S. GAAP financial measures of Operating Profit,
Income Tax Expense, Net Income (Loss) - Omnicom Group Inc. and
Diluted Net Income (Loss) Per Share - Omnicom Group Inc., as well
as the non-GAAP amounts excluding the impact of certain
repositioning actions and the net loss recognized on dispositions
of certain subsidiaries in the column entitled "Non-GAAP 2020
Adjusted" for the three months ended June 30, 2020. We believe
that the amounts presented in the "Non-GAAP 2020 Adjusted" column
are useful measures for investors to understand the impact these
items had on our reported results. 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.
|
|
|
(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 net impact of these items decreased
Operating Profit by $277.9 million, Net Income - Omnicom Group Inc.
by $223.1 million and Diluted Net Income Per Share - Omnicom Group
Inc. $1.03 per share for the three months ended June 30,
2020.
|
|
Omnicom Group
Inc.
Non-GAAP Financial Measures - Adjusted for the
Impact of Second Quarter 2020
Repositioning Actions and Net Loss on Dispositions
Six
Months Ended June 30, 2020
(Unaudited)
(Dollars in Millions, Except Per Share Data)
|
|
|
2020 (a)
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
2020
Adjusted
|
|
|
|
|
|
|
|
Operating
Profit
|
$
|
482.7
|
|
|
$
|
277.9
|
|
|
$
|
760.6
|
|
|
Net Interest
Expense
|
93.0
|
|
|
—
|
|
|
93.0
|
|
|
Income Tax
Expense
|
119.3
|
|
|
54.8
|
|
|
174.1
|
|
|
Income (Loss) From
Equity Method Investments
|
(13.0)
|
|
|
—
|
|
|
(13.0)
|
|
|
Net Income Attributed
To Noncontrolling Interests
|
23.4
|
|
|
—
|
|
|
23.4
|
|
|
Net Income - Omnicom
Group Inc.
|
$
|
234.0
|
|
|
$
|
223.1
|
|
|
$
|
457.1
|
|
|
|
|
|
|
|
|
Diluted Net Income
Per Share - Omnicom Group Inc.
|
$
|
1.08
|
|
|
$
|
1.03
|
|
|
$
|
2.11
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares (in millions)
|
216.5
|
|
|
216.5
|
|
|
216.5
|
|
|
|
The above table
presents the U.S. GAAP financial measures of Operating Profit,
Income Tax Expense, Net Income - Omnicom Group Inc. and Diluted Net
Income Per Share - Omnicom Group Inc., as well as the impact
certain repositioning actions and of the net loss recognized on
dispositions of certain subsidiaries which were recorded in the
second quarter of 2020, for the six months ended June 30,
2020. The amounts presented in the column "Non-GAAP 2020 Adjusted"
excludes these items from our results for the period presented,
which are non-GAAP operating performance measures. We believe that
the amounts excluding the impact of these items are useful measures
for investors to understand the impact these items had on our
reported results. 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.
|
|
|
|
(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 net impact of these items decreased
Operating Profit by $277.9 million, Net Income - Omnicom Group Inc.
by $223.1 million and Diluted Net Income Per Share - Omnicom Group
Inc. $1.03 per share for the six months ended June 30,
2020.
|
|
Omnicom Group
Inc.
Non-GAAP Financial Measures - Adjusted for the
Impact of Second Quarter 2020
Repositioning Actions and Net Loss on Dispositions
Six
Months Ended June 30
(Unaudited)
(Dollars in Millions, Except Per Share Data)
|
|
|
2020 (a)
|
|
Non-GAAP
2020
Adjusted
|
|
2019
|
|
|
|
|
|
|
|
Operating
Profit
|
$
|
482.7
|
|
|
$
|
760.6
|
|
|
$
|
1,002.6
|
|
|
Net Interest
Expense
|
93.0
|
|
|
93.0
|
|
|
96.2
|
|
|
Income Tax
Expense
|
119.3
|
|
|
174.1
|
|
|
233.2
|
|
|
Income (Loss) From
Equity Method Investments
|
(13.0)
|
|
|
(13.0)
|
|
|
0.7
|
|
|
Net Income Attributed
To Noncontrolling Interests
|
23.4
|
|
|
23.4
|
|
|
40.0
|
|
|
Net Income - Omnicom
Group Inc.
|
$
|
234.0
|
|
|
$
|
457.1
|
|
|
$
|
633.9
|
|
|
|
|
|
|
|
|
Diluted Net Income
Per Share - Omnicom Group Inc.
|
$
|
1.08
|
|
|
$
|
2.11
|
|
|
$
|
2.85
|
|
|
|
|
|
|
|
|
Diluted weighted
average shares (in millions)
|
216.5
|
|
|
216.5
|
|
|
222.5
|
|
|
|
The above table
identifies the U.S. GAAP financial measures of Operating Profit,
Income Tax Expense, Net Income - Omnicom Group Inc. and Diluted Net
Income Per Share - Omnicom Group Inc., as well as the non-GAAP
amounts excluding the impact of certain repositioning actions and
the net loss recognized on dispositions of certain subsidiaries in
the column entitled "Non-GAAP 2020 Adjusted" for the six months
ended June 30, 2020. We believe that the amounts presented in
the "Non-GAAP 2020 Adjusted" column are useful measures for
investors to understand the impact these items had on our reported
results. 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.
|
|
|
(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 net impact of these items decreased
Operating Profit by $277.9 million, Net Income - Omnicom Group Inc.
by $223.1 million and Diluted Net Income Per Share - Omnicom Group
Inc. $1.03 per share for the six months ended June 30,
2020.
|
|
Omnicom Group
Inc.
Reconciliation of Non-GAAP Financial Measures - 2020
Adjusted Operating Profit
Three Months Ended
June 30
(Unaudited)
(Dollars in Millions)
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Operating
Profit
|
$
|
62.5
|
|
|
$
|
573.7
|
|
|
Net loss on
dispositions of subsidiaries
|
25.1
|
|
|
—
|
|
|
Realignment
actions
|
252.8
|
|
|
—
|
|
|
Operating Profit,
Non-GAAP 2020 Adjusted
|
$
|
340.4
|
|
|
$
|
573.7
|
|
|
|
|
|
|
Revenue
|
$
|
2,800.7
|
|
|
$
|
3,719.8
|
|
|
Operating Profit,
Non-GAAP 2020 Adjusted
|
$
|
340.4
|
|
|
$
|
573.7
|
|
|
Operating Margin,
Non-GAAP 2020 Adjusted
|
12.2
|
%
|
|
15.4
|
%
|
|
|
The above table
reconciles the U.S. GAAP financial measures of Operating Profit and
Operating Margin to the non-GAAP financial measures of Operating
Profit, Non-GAAP 2020 Adjusted and Operating Margin, Non-GAAP 2020
Adjusted, which exclude the impact of expenses recorded in
connection with certain repositioning actions and the net loss
recognized on dispositions of certain subsidiaries, which were
recorded in the second quarter of 2020, for the three months ended
June 30, 2020. We believe that the amounts excluding the
impact of these items are useful measures for investors to
understand the impact these actions had on our reported results.
Non-GAAP financial measures should not be considered in isolation
from, or as a substitute for, financial information presented in
compliance with U.S. GAAP. Non-GAAP financial measures reported by
us may not be comparable to similarly titled amounts reported by
other companies.
|
|
Omnicom Group
Inc.
Reconciliation of Non-GAAP Financial Measures - 2020
Adjusted Operating Profit
Six Months Ended
June 30
(Unaudited)
(Dollars in Millions)
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Operating
Profit
|
$
|
482.7
|
|
|
$
|
1,002.6
|
|
|
Net loss on
dispositions of subsidiaries
|
25.1
|
|
|
—
|
|
|
Realignment
actions
|
252.8
|
|
|
—
|
|
|
Operating Profit,
Non-GAAP 2020 Adjusted
|
$
|
760.6
|
|
|
$
|
1,002.6
|
|
|
|
|
|
|
Revenue
|
$
|
6,207.6
|
|
|
$
|
7,188.7
|
|
|
Operating Profit,
Non-GAAP 2020 Adjusted
|
$
|
760.6
|
|
|
$
|
1,002.6
|
|
|
Operating Margin,
Non-GAAP 2020 Adjusted
|
12.3
|
%
|
|
13.9
|
%
|
|
|
The above table
reconciles the U.S. GAAP financial measures of Operating Profit and
Operating Margin to the non-GAAP financial measures of Operating
Profit, Non-GAAP 2020 Adjusted and Operating Margin, Non-GAAP 2020
Adjusted, which exclude the impact of expenses recorded in
connection with certain repositioning actions and the net loss
recognized on dispositions of certain subsidiaries, which were
recorded in the second quarter of 2020, for the six months ended
June 30, 2020. We believe that the amounts excluding the
impact of these items are useful measures for investors to
understand the impact these actions had on our reported results.
Non-GAAP financial measures should not be considered in isolation
from, or as a substitute for, financial information presented in
compliance with U.S. GAAP. Non-GAAP financial measures reported by
us may not be comparable to similarly titled amounts reported by
other companies.
|
|
Omnicom Group
Inc.
Reconciliation of Non-GAAP Financial Measures - 2020
Adjusted Net Income - Omnicom Group Inc.
Three and Six
Months Ended June 30, 2020
(Unaudited)
(Dollars in Millions)
|
|
|
Three Months
Ended June 30,
2020
|
|
Six Months
Ended June 30,
2020
|
|
|
|
|
|
Net Income (Loss) -
Omnicom Group Inc., as reported
|
$
|
(24.2)
|
|
|
$
|
234.0
|
|
|
Repositioning actions
- Incremental Severance and other items,
before income tax expense
|
150.0
|
|
|
150.0
|
|
|
Repositioning actions
- Right-of-use asset impairments and
other real estate costs, before income tax expense
|
102.8
|
|
|
102.8
|
|
|
Net loss on
dispositions, before income tax expense
|
25.1
|
|
|
25.1
|
|
|
Income tax benefit on
repositioning actions and loss on
dispositions
|
(54.8)
|
|
|
(54.8)
|
|
|
Net Income - Omnicom
Group Inc., Non-GAAP 2020 Adjusted
|
$
|
198.9
|
|
|
$
|
457.1
|
|
|
|
|
|
|
|
The above table
reconciles the U.S. GAAP financial measure of Net Income (Loss) -
Omnicom Group Inc. to the non-GAAP financial measure of Net Income
- Omnicom Group Inc., Non-GAAP 2020 Adjusted, which adjusts for the
impact of the certain repositioning actions and the net loss
recognized on dispositions of certain subsidiaries for the three
and six months ended June 30, 2020. We believe the amounts
adjusted for the impact of these items are useful measures for
investors to understand the impact these actions had on the
comparability of our reported results. 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.
|
View original
content:http://www.prnewswire.com/news-releases/omnicom-group-reports-second-quarter-and-year-to-date-2020-results-301100757.html
SOURCE Omnicom Group Inc.