Omnicom Group
FOURTH QUARTER 2007 RESULTS
Investor Presentation
February 12, 2008
Exhibit 99.2
1
The following materials have been prepared for use in the February 12, 2008 conference call on Omnicom’s results of
operations for the year ended December 31, 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, except as required by law.
Other Information
All dollar amounts are in millions except for EPS. The 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.
2
2007 vs. 2006 P&L Summary
2007
2006
%
2007
2006
%
Revenue
3,626.0
$
3,216.2
$
12.7%
12,694.0
$
11,376.9
$
11.6%
Operating Profit
531.9
474.2
12.2%
1,659.1
1,483.5
11.8%
% Margin
14.7%
14.7%
13.1%
13.0%
Net Interest Expense
14.3
24.1
74.0
91.6
Profit Before Tax
517.6
450.1
15.0%
1,585.1
1,391.9
13.9%
% Margin
14.3%
14.0%
12.5%
12.2%
Taxes
175.5
151.4
536.9
466.9
% Tax Rate
33.9%
33.6%
33.9%
33.5%
Profit After Tax
342.1
298.7
14.5%
1,048.2
925.0
13.3%
Equity in Affiliates
12.7
12.0
38.4
29.6
Minority Interest
(40.9)
(33.5)
(110.9)
(90.6)
Net Income
313.9
$
277.2
$
13.2%
975.7
$
864.0
$
12.9%
Fourth Quarter
Full Year
3
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
$ 0.97
0.96
18.5
323.2
327.0
$0.150
2006
2007
Fourth Quarter
$ 0.82
0.81
338.1
342.7
$0.125
$ 2.99
2.95
18.0
326.0
330.4
$0.575
2006
2007
Full Year
$ 2.52
2.50
342.9
346.1
$0.500
%
(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.”
%
4
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.
$
%
$
%
Prior Period Revenue
3,216.2
$
11,376.9
$
Foreign Exchange (FX) Impact (a)
161.7
5.0%
436.8
3.8%
Acquisition Revenue (b)
36.2
1.1%
77.7
0.7%
Organic Revenue (c)
211.9
6.6%
802.6
7.1%
Current Period Revenue
3,626.0
$
12.7%
12,694.0
$
11.6%
Fourth Quarter
Full Year
5
Fourth Quarter
Full Year
Advertising
43.0%
PR
10.0%
CRM
36.6%
Specialty
10.4%
Advertising
43.5%
PR
9.4%
CRM
37.0%
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
1,578.6
13.1%
Advertising
5,463.7
12.0%
CRM
1,342.2
13.3%
####
CRM
4,645.7
14.1%
PR
339.5
9.6%
9.4%
PR
1,273.1
11.1%
Specialty
365.7
12.2%
####
Specialty
1,311.5
2.5%
6
Fourth Quarter
2007 Revenue By Geography
United
States
52.8%
UK
11.0%
Euro
Markets
21.3%
Other
14.9%
Full Year
United
States
51.0%
UK
10.1%
Euro
Markets
22.9%
Other
16.0%
(a) “Growth” is the year-over-year increase or decrease from the prior period.
$ Mix
$ Growth (a)
$ Mix
$ Growth (a)
United States
1,845.9
$
160.8
$
United States
6,704.2
$
510.2
$
Organic
142.8
Organic
467.7
Acquisition
18.0
Acquisition
42.5
International
1,780.1
$
249.0
$
International
5,989.8
$
806.9
$
Organic
69.1
Organic
334.9
Acquisition
18.2
Acquisition
35.2
FX
161.7
FX
436.8
$ Mix
% Growth (a)
$ Mix
% Growth (a)
United States
1,845.9
$
9.5%
United States
6,704.2
$
8.2%
Euro Currency Markets
831.2
15.6%
Euro Currency Markets
2,709.7
16.9%
United Kingdom
367.8
6.7%
United Kingdom
1,393.8
13.3%
Other
581.1
24.3%
Other
1,886.3
15.3%
7
Cash Flow – GAAP Presentation (condensed)
2007
2006
Net Income
975.7
$
864.0
$
Stock-Based Compensation Expense
68.7
71.1
Depreciation and Amortization
208.6
190.0
Other Non-Cash Items to Reconcile to Net Cash Provided by Operations
119.7
78.2
Other Changes in Working Capital
243.8
564.5
Excess Tax Benefit on Stock Compensation
(17.2)
(26.6)
Net Cash Provided by Operations
1,599.3
1,741.2
Capital Expenditures
(223.0)
(177.6)
Acquisitions
(358.8)
(236.3)
Proceeds from Sale of Businesses
-
31.4
Repayment of LT Notes Receivable
-
13.5
Other Investing Activities, net
141.3
180.2
Net Cash Used by Investing Activities
(440.5)
(188.8)
Dividends
(182.8)
(175.8)
Proceeds from Issuance of Debt
3.4
996.6
Repayment of Debt
(2.0)
(300.4)
Stock Repurchases
(899.7)
(1,368.2)
Share Transactions Under Employee Stock Plans
100.9
321.5
Excess Tax Benefit on Stock Compensation
17.2
26.6
Other Financing Activities
(77.7)
(83.8)
Net Cash Used by Financing Activities
(1,040.7)
(583.5)
Effect of exchange rate changes on cash and cash equivalents
(64.4)
(65.2)
Net Increase in Cash and Cash Equivalents
53.7
$
903.7
$
Full Year
8
Current Credit Picture
(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 have subsequently put the notes to us for repurchase.
2007
2006
Operating Income (EBIT) (a)
$
1,659
$
1,484
Net Interest Expense (a)
$
74.0
$
91.6
EBIT / Net Interest
22.4
x
16.2
x
Net Debt / EBIT
0.7
x
0.8
x
Debt:
Bank Loans (Due Less Than 1 Year)
$
12
$
11
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
727
Convertible Notes Due 6/15/33 (b)
-
39
Convertible Notes Due 7/1/38 (b)
467
428
10 Year Notes Due 4/15/16
996
996
Other Debt
20
18
Total Debt
$
3,069
$
3,066
Cash and Short Term Investments
1,841
1,929
Net Debt
$
1,228
$
1,137
Full Year
9
Current Liquidity Picture
(a)
Credit facility expires June 23, 2011.
(b)
Represents uncommitted facilities in the U.S., U.K. and Canada as of December 31, 2007. 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
12
12
-
Total Committed Facilities
2,512
12
2,500
Uncommitted Facilities (b)
443
-
-
(b)
Total Credit Facilities
2,955
$
12
$
2,500
$
Cash and Short Term Investments
1,841
Total Liquidity Available
4,341
$
As of December 31, 2007
10
Acquisitions Summary
11
Acquisition Related Expenditures
Note: See appendix for subsidiary acquisition profiles.
(a) Includes acquisitions of a majority interest in agencies resulting in their consolidation.
(b) Includes acquisitions of additional equity interests in existing affiliate agencies resulting in their majority ownership and consolidation.
(c) 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.
(d) Includes the acquisition of additional equity interests in already consolidated subsidiary agencies.
(e) Includes additional consideration paid for acquisitions completed in prior periods.
New Subsidiary Acquisitions (a)
160
$
Affiliates to Subsidiaries (b)
3
Affiliates (c)
-
Existing Subsidiaries (d)
56
Earn-outs (e)
159
Total Acquisition Expenditures
378
$
Full Year 2007
12
Potential Earn-out Obligations
The following is a calculation of future earn-out obligations as of
December 31, 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.
2008
2009
2010
2011
Thereafter
Total
173
$
88
$
90
$
26
$
1
$
378
$
13
Potential Obligations
(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 December 31, 2007), assuming these underlying
acquired agencies continue to perform at their current levels: (a)
Currently
Exercisable
Not Currently
Exercisable
Total
Subsidiary Agencies
169
$
93
$
262
$
Affiliated Agencies
39
13
52
Total
208
$
106
$
314
$
14
Fourth Quarter Acquisitions
Brandcom
Brandcom is a full service advertising agency offering strategic,
creative and point of sale solutions to its clients business
challenges. Brandcom will work with the DDB network.
Brandcom is based in Dubai, United Arab Emirates.
15
Fourth Quarter Acquisitions
Waters Widgren
WatersWidgren is a full service agency that was formed in 2005.
The agency was the most recognized Swedish agency at
Cannes in 2007.
Located in Stockholm, Sweden, WatersWidgren will merge with
TBWA\Sweden to form WatersWidgren\TBWA.
