Omnicom Group
SECOND QUARTER 2007 RESULTS
Investor Presentation
July 24, 2007
Exhibit 99.2
1
The following materials have been prepared for use in the July 24, 2007 conference call on Omnicom’s results of
operations for the quarter ended June 30, 2007. The call will be archived on the Internet at
http://www.omnicomgroup.com/financialwebcasts.
Forward-Looking Statements
Certain of the statements in this document constitute forward-looking statements within the meaning of the Private
Securities Litigation Act of 1995. These statements relate to future events or future financial performance and involve
known and unknown risks and other factors that may cause our actual or our industry’s results, levels of activity or
achievement to be materially different from those expressed or implied by any forward-looking statements. These risks
and uncertainties include, but are not limited to, our future financial condition and results of operations, changes in
general economic conditions, competitive factors, changes in client communication requirements, the hiring and retention
of human resources and our international operations, which are subject to the risks of currency fluctuations and
exchange controls. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,”
“could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential” or “continue” or
the negative of those terms or other comparable terminology. These statements are present expectations. Actual events
or results may differ materially. We undertake no obligation to update or revise any forward-looking statement.
Other Information
All dollar amounts are in millions except for EPS. The following financial information contained in this document has not
been audited, although some of it has been derived from Omnicom’s historical financial statements, including its audited
financial statements. In addition, industry, operational and other non-financial data contained in this document have been
derived from sources we believe to be reliable, but we have not independently verified such information, and we do not,
nor does any other person, assume responsibility for the accuracy or completeness of that information.
The inclusion of information in this presentation does not mean that such information is material or that disclosure of
such information is required.
2007 vs. 2006 P&L Summary
2
2007
2006
%
2007
2006
%
Revenue
3,126.1
$
2,823.4
$
10.7%
5,966.7
$
5,386.3
$
10.8%
Operating Income
461.6
417.4
10.6%
777.1
701.9
10.7%
% Margin
14.8%
14.8%
13.0%
13.0%
Net Interest Expense
22.2
25.5
40.5
40.7
Profit Before Tax
439.4
391.9
12.1%
736.6
661.2
11.4%
% Margin
14.1%
13.9%
12.3%
12.3%
Taxes
148.8
131.7
249.3
222.6
% Tax Rate
33.9%
33.6%
33.8%
33.7%
Profit After Tax
290.6
260.2
11.7%
487.3
438.6
11.1%
Equity in Affiliates
12.5
6.3
17.7
11.2
Minority Interest
(26.4)
(22.4)
(45.3)
(40.1)
Net Income
276.7
$
244.1
$
13.4%
459.7
$
409.7
$
12.2%
Second Quarter
Year to Date
2007 vs. 2006 Earnings Per Share (a)
Earnings per Share:
Basic
Diluted
Growth Rate, Diluted
Weighted Average Shares (millions):
Basic
Diluted
Dividend Declared Per Share
$ 0.85%
0.84%
18.3%
325.8%
330.8%
$0.15%
2006
2007
Second Quarter
$ 0.72
0.71
340.5
344.1
$0.125
$ 1.40%
1.38%
17.9%
328.4%
333.5%
$0.275%
2006
2007
Year to Date
$ 1.18
1.17
347.3
350.4
$0.25
(a)
In connection with our two-for-one stock split distributed on June 25, 2007, which was effected in the form of a 100% stock
dividend, all current and prior period per share amounts and weighted average share amounts have been adjusted in accordance
with SFAS No. 128, “Earnings per Share.”
3
2007 Total Revenue Growth
(a)
To calculate the FX impact, we first convert the current period’s local currency revenue using the average exchange rates from the
equivalent prior period to arrive at constant currency revenue. The FX impact equals the difference between the current period
revenue in U.S. dollars and the current period revenue in constant currency.
(b)
Acquisition revenue is the aggregate of the applicable prior period revenue of the acquired businesses. Netted against this number
is the revenue of any business included in the prior period reported revenue that was disposed of subsequent to the prior period.
(c)
Organic revenue is calculated by subtracting both the acquisition revenue and the FX impact from total revenue growth.
4
$
%
$
%
Prior Period Revenue
2,823.4
$
5,386.3
$
Foreign Exchange (FX) Impact (a)
88.7
3.1%
176.0
3.3%
Acquisition Revenue (b)
6.2
0.2%
8.3
0.1%
Organic Revenue (c)
207.8
7.4%
396.1
7.4%
Current Period Revenue
3,126.1
$
10.7%
5,966.7
$
10.8%
Second Quarter
Year to Date
5
Second Quarter
Year to Date
Advertising
43.5%
PR
10.3%
CRM
35.8%
Specialty
10.4%
Advertising
43.7%
PR
10.3%
CRM
35.9%
Specialty
10.1%
(a) “Growth” is the year-over-year increase or decrease from the prior period.
2007 Revenue By Discipline
Pie Chart
$ Mix
% Growth
(a)
$ Mix
% Growth
(a)
Advertising
1,366.5
11.8%
####
Advertising
2,592.3
11.3%
CRM
1,121.0
14.8%
####
CRM
2,137.7
14.5%
PR
321.7
11.9%
####
PR
615.8
12.7%
Specialty
316.9
-5.9%
####
Specialty
620.9
-3.5%
Second Quarter
United
States
53.7%
UK
11.3%
Euro
Markets
20.8%
Other
14.2%
Year to Date
United
States
53.1%
UK
11.1%
Euro
Markets
21.4%
Other
14.4%
6
(a) “Growth” is the year-over-year increase or decrease from the prior period.
2007 Revenue By Geography
$ Mix
$ Growth(a)
$ Mix
$ Growth(a)
United States
1,659.7
$
124.3
$
United States
3,203.5
$
235.1
$
Organic
121.7
Organic
232.1
Acquisition
2.6
Acquisition
3.0
International
1,466.4
$
178.4
$
International
2,763.2
$
345.3
$
Organic
86.1
Organic
164.0
Acquisition
3.6
Acquisition
5.3
FX
88.7
FX
176.0
$ Mix
% Growth(a)
$ Mix
% Growth(a)
United States
1,659.7
$
8.1%
United States
3,203.5
$
7.9%
Euro Currency Markets
667.8
16.9%
Euro Currency Markets
1,243.0
17.7%
United Kingdom
347.4
14.3%
United Kingdom
673.4
16.6%
Other
451.2
9.3%
Other
846.8
7.9%
Cash Flow – GAAP Presentation (condensed)
7
2007
2006
Net Income
459.7
$
409.7
$
Stock-Based Compensation Expense
36.2
33.9
Depreciation and Amortization
98.3
90.3
Other Non-Cash Items to Reconcile to Net Cash Provided by Operations
43.4
37.4
Other Changes in Working Capital
(670.6)
(374.6)
Excess Tax Benefit on Stock Compensation
(14.5)
(10.1)
Net Cash (Used) Provided by Operations
(47.5)
186.6
Capital Expenditures
(101.2)
(73.0)
Acquisitions
(143.9)
(138.5)
Other Investing Activities, net
141.3
332.4
Repayment of LT Notes Receivable
-
13.5
Net Cash (Used) Provided by Investing Activities
(103.8)
134.4
Dividends
(84.2)
(89.8)
Proceeds from Issuance of Debt
0.7
995.8
Repayment of Debt
(0.2)
(134.1)
Stock Repurchases
(756.8)
(978.6)
Share Transactions Under Employee Stock Plans
66.3
173.5
Excess Tax Benefit on Stock Compensation
14.5
10.1
Other Financing Activities
(43.5)
(42.7)
Net Cash Used by Financing Activities
(803.2)
(65.8)
Effect of exchange rate changes on cash and cash equivalents
(12.6)
1.0
Net (Decrease) Increase in Cash and Cash Equivalents
(967.1)
$
256.2
$
6 Months Ended June 30,
Current Credit Picture
8
(a) “Operating Income (EBIT)” and “Net Interest Expense” calculations shown are the latest twelve month (“LTM”) figures for the periods specified.
Although our bank agreements reference EBITDA, we have used EBIT for this presentation because EBITDA is a non-GAAP measure.
(b) In June 2006, holders of our Convertible Notes Due 6/15/33 were offered a supplemental interest payment not to put the notes to us for repurchase
and to consent to certain amendments to the notes, including extending the maturity date on such notes. Holders of $467.3 million of notes
consented to the amendments, thus creating the Convertible Notes Due 7/1/38. The remaining holders of the notes put the notes to us for repurchase.
2007
2006
Operating Income (EBIT)(a)
$
1,559
$
1,402
Net Interest Expense(a)
$
91.4
$
73.5
EBIT / Net Interest
17.1
x
19.1
x
Net Debt / EBIT
1.4
x
1.5
x
Debt:
Bank Loans (Due Less Than 1 Year)
$
11
$
17
CP Issued Under $2.5B - 5 Year Revolver Due 6/23/11
-
-
Convertible Notes Due 2/7/31
847
847
Convertible Notes Due 7/31/32
727
892
Convertible Notes Due 6/15/33
(b)
-
40
Convertible Notes Due 7/1/38
(b)
467
427
10 Year Notes Due 4/15/16
996
995
Other Debt
19
19
Total Debt
$
3,067
$
3,237
Cash and Short Term Investments
821
1,135
Net Debt
$
2,246
$
2,102
LTM ended June 30,
Current Liquidity Picture
9
(a)
Credit facility expires June 23, 2011.
(b)
Represents uncommitted facilities in the U.S., U.K. and Canada. These amounts are excluded from our available
liquidity for purposes of this presentation.
Total Amount
Of Facility
Outstanding
Available
Committed Facilities
5 Year Revolver
(a)
2,500
$
-
$
2,500
$
Other Committed Credit Facilities
11
11
-
Total Committed Facilities
2,511
11
2,500
Uncommitted Facilities
(b)
372
-
-
(b)
Total Credit Facilities
2,883
$
11
$
2,500
$
Cash and Short Term Investments
821
Total Liquidity Available
3,321
$
As of June 30, 2007
Acquisitions Summary
10
Acquisition Related Expenditures
11
Note: See appendix for subsidiary acquisition profiles.
Includes acquisitions of a majority interest in agencies resulting in their consolidation.
Includes acquisitions of additional equity interests in existing affiliate agencies resulting in their majority ownership and consolidation.
Includes acquisitions of less than a majority interest in agencies in which Omnicom did not have a prior equity interest and the acquisition
of additional interests in existing affiliated agencies that did not result in majority ownership.
Includes the acquisition of additional equity interests in already consolidated subsidiary agencies.
Includes additional consideration paid for acquisitions completed in prior periods.
(a)
(b)
(c)
(d)
(e)
New Subsidiary Acquisitions (a)
17
$
Affiliates to Subsidiaries (b)
-
Affiliates (c)
-
Existing Subsidiaries (d)
32
Earn-outs (e)
97
Total Acquisition Expenditures
146
$
6 Months YTD 2007
Potential Earn-out Obligations
The following is a calculation of future earn-out obligations as of
June 30, 2007, assuming that the underlying acquired agencies
continue to perform at their current levels: (a)
(a)
The ultimate payments will vary as they are dependent on future events and changes in FX rates.
12
2007
2008
2009
2010
Thereafter
Total
62
$
125
$
73
$
97
$
34
$
391
$
Potential Obligations
13
(a) The ultimate payments will vary as they are dependent on future events and changes in FX rates.
In conjunction with certain transactions, Omnicom has agreed to
acquire (at the sellers’ option) additional equity interests. If these rights
are exercised, there would likely be an increase in our net income as a
result of our increased ownership and the reduction of minority interest
expense. The following is a calculation of these potential future
obligations (as of June 30, 2007), assuming these underlying acquired
agencies continue to perform at their current levels: (a)
Currently
Exercisable
Not Currently
Exercisable
Total
Subsidiary Agencies
143
$
76
$
219
$
Affiliated Agencies
65
7
72
Total
208
$
83
$
291
$
Second Quarter Acquisitions
14
ECI
ECI is an award winning direct response agency specializing in
one-to-one marketing for highly regulated industries, such as
financial services, healthcare, telecommunications and utilities.
In addition to its full-service agency capabilities, ECI offers
comprehensive in-house database resources, with on-site data
warehousing, modeling and analysis.
ECI will operate as a member of the Star Marketing Group and is
located in San Francisco, California.
Second Quarter Acquisitions
15
ASA Events
ASA Events is a youth lifestyle marketing and entertainment
company that connects brands to consumers through
professional and amateur sports events. ASA Events’ services
include event design and production, mobile marketing, action
sports consulting and management of proprietary content related
to action sports events.
The company is a member of the Radiate Group of companies
and is located in Culver City, California.
