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Omnicom Group Annual Report, Year Ended Dec 31, 2009

Filing Date
Filed February 19, 2010
Period End
December 31, 2009
Security
OMC
In the record · 2016–202610-K1110-Q338-K107

OMC filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 107 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Jul ’17Jul ’17
  2. Material agreement8-K · Jul ’19Jul ’19
  3. Leadership change8-K · Feb ’22Feb ’22
  4. Material agreement8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed February 19, 2010. Cited figures are marked; the original filing is the authoritative source.

Omnicom Group Inc. (NYSE: OMC) is a strategic holding company providing advertising, marketing and corporate communications services through multiple agencies worldwide.

Its 2009 revenue declined 12.3% to $11,720.7 milliona from $13,359.9 million in 2008, driven by a broad-based drop in client spending, with foreign exchange reducing revenue by $454.3 million and organic growth declining by $1,154.1 million. Operating income fell 18.6% to $1,374.9 million, and net income attributable to Omnicom decreased 20.7% to $793.0 million, or $2.53 diluted EPS versus $3.14 in 2008. Salary and service costs rose to 72.1% of revenue from 71.6%, partly reflecting $31.4 million of higher severance costs.

Balance sheet and liquidity improved during the year. Net debt fell to $662.9 millionb from $1,960.8 million, and cash and short-term investments rose to $1,594.8 million. Total debt declined to $2,257.7 million after the company issued $500 million of 6.25% Senior Notes due 2019 and retired a substantial part of its convertible notes.

Convertible debt outstanding fell to $726.0 millionc, with holders able to put $467.5 million in June 2010 and $252.7 million in July 2010. The company also has a $2.5 billion credit facility expiring June 2011, and its debt was rated A- by S&P, Baa1 by Moody's and A- by Fitch. The filing also discloses a securities class action (In re Omnicom Group Inc. Securities Litigation) that was dismissed in January 2008 and is on appeal before the Second Circuit, where the outcome is currently not determinable.

Management reported effective internal control over financial reporting as of December 31, 2009, and KPMG LLP issued an unqualified audit opinion. Dividends were $0.60d per share in both 2008 and 2009.

02—Key points

Key Highlights

  1. Revenue fell 12.3% to $11,720.7 million in 2009, with organic growth accounting for a decrease of $1,154.1 million and foreign exchange a decrease of $454.3 million.
  2. Operating income declined 18.6% to $1,374.9 million, and operating margin was 11.7% versus 12.6% in 2008.
  3. Net income attributable to Omnicom Group Inc. decreased 20.7% to $793.0 million; diluted EPS was $2.53 versus $3.14.
  4. Net debt decreased to $662.9 million from $1,960.8 million, while cash and short-term investments rose to $1,594.8 million.
  5. Convertible notes outstanding were reduced to $726.0 million, though $467.5 million may be put to the company in June 2010 and $252.7 million in July 2010.
  6. The company issued $500 million of 6.25% Senior Notes due 2019 and maintains a $2.5 billion credit facility expiring June 2011.
  7. Largest client represented 3.1% of 2009 revenue, and the top 100 clients represented 50.4%.

03—One dollar

04—Financials

Financial Highlights

Figures from 10-KFY2009filed February 19, 2010
Revenue$11.72BNet Income$793.00M6.8% Net MarginEPS (Diluted)$2.53Total Assets$17.92BCash & Equivalents$1.59BFree Cash Flow$1.60B

Financial Statements

FY2009 against FY2008

Line itemFY2009FY2008Change
Revenue$11.72B$13.36B−12.3%
Operating Expenses$10.35B$11.67B−11.4%
Operating Income$1.37B$1.69B−18.6%
Interest Expense$122.20M$124.60M−1.9%
Net Income$793.00M$1.00B−20.7%
EPS (Basic)$2.54$3.17−19.9%
EPS (Diluted)$2.53$3.14−19.4%
Shares Outstanding (Basic)308.20M313.00M−1.5%
Shares Outstanding (Diluted)310.40M314.80M−1.4%

05—Questions

Frequently Asked Questions

  1. How did Omnicom's revenue and profitability change in 2009?

    Revenue decreased 12.3% to $11,720.7 million from $13,359.9 million, as clients reduced advertising and marketing spending amid the global economic downturn. Operating income fell to $1,374.9 million from $1,689.4 million, and net income attributable to Omnicom decreased 20.7% to $793.0 million.

  2. How much debt does Omnicom have and when do convertible notes come due for repurchase?

    Total debt was $2,257.7 million at December 31, 2009, down from $3,073.2 million a year earlier. Holders of the 2033 and 2038 Notes ($467.5 million combined) may require repurchase in June 2010, and holders of the 2032 Notes ($252.7 million) in July 2010. The company expects to have sufficient cash and unused credit to fund these puts.

  3. What is the status of the securities class action against Omnicom?

    The consolidated class action in the Southern District of New York was dismissed in full in January 2008, and plaintiffs appealed to the Second Circuit, where oral argument occurred on May 5, 2009. The filing states that the outcome cannot currently be determined and that the defendants intend to vigorously oppose the appeal.

  4. What dividends and share repurchases did Omnicom make in 2009?

    Omnicom declared dividends of $0.60 per common share in 2009, the same as in 2008, and paid $187.1 million in dividends. The company repurchased only $15.0 million of treasury shares in 2009, and the filing states that it plans to resume repurchases beginning in 2010.

06—Continue

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