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Omnicom Group Annual Report, Year Ended Dec 31, 2014

Filing Date
Filed February 10, 2015
Period End
December 31, 2014
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 10, 2015. Cited figures are marked; the original filing is the authoritative source.

Omnicom Group Inc. (OMC) reported its 2014 annual results in this Form 10-K, filed February 10, 2015.

The company is a strategic holding company providing advertising, marketing and corporate communications services through five branded agency networks, with revenue of $15,317.8 milliona in 2014, up 5.0% from $14,584.5 million in 2013. Organic growth was 5.7%, foreign exchange reduced revenue by 0.8%, and acquisitions net of dispositions added 0.1%. Operating income rose to $1,944.1 million from $1,825.3 million, with operating margin of 12.7% versus 12.5%.

Net income attributed to Omnicom Group Inc. increased 11.4% to $1,104.0 million, and diluted earnings per share rose to $4.24b from $3.71. Results were affected by the proposed merger with Publicis Groupe S.A., which was terminated on May 8, 2014 with no termination fee payable by either party. Merger expenses were $8.8 million in 2014 and $41.4 million in 2013.

Excluding these expenses, diluted EPS was $4.23c in 2014 and $3.84 in 2013. Management expects 2015 revenue to increase modestly in excess of weighted average nominal GDP growth in major markets, but expects foreign exchange to reduce 2015 revenue by approximately 5%. Balance sheet and capital activity saw a notable shift.

Cash and cash equivalents decreased to $2.4 billion, and net debt rose to $2,179.9 milliond from $1,311.0 million. The company issued $750 million of 3.65% Senior Notes due 2024 and redeemed its 2032 convertible notes.

Share repurchases totaled $1,063.0 million, and dividends declared were $1.90 per share, up from $1.60. Management stated it expects sufficient liquidity to fund non-discretionary and discretionary spending through 2015.

02—Key points

Key Highlights

  1. Revenue increased 5.0% to $15,317.8 million, with organic growth of 5.7%; North America grew 6.5% and Asia Pacific grew 1.4%.
  2. Operating income rose to $1,944.1 million, and operating margin improved to 12.7% from 12.5%.
  3. Net income attributed to Omnicom Group Inc. grew 11.4% to $1,104.0 million; diluted EPS was $4.24 versus $3.71 in 2013.
  4. The proposed Publicis merger was terminated on May 8, 2014 with no termination fee; merger expenses were $8.8 million in 2014 versus $41.4 million in 2013.
  5. Net debt increased to $2,179.9 million from $1,311.0 million, after issuing $750 million of 3.65% Senior Notes due 2024 and redeeming convertible notes.
  6. Share repurchases totaled $1,063.0 million in 2014, and dividends declared rose to $1.90 per share from $1.60.
  7. Credit ratings are BBB+ (S&P) and Baa1 (Moody's) on long-term debt; the Leverage Ratio was 2.0 times against a covenant maximum of 3 times.

03—One dollar

04—Financials

Financial Highlights

Figures from 10-KFY2014filed February 10, 2015
Revenue$15.32BNet Income$1.10B7.2% Net MarginEPS (Diluted)$4.24Total Assets$21.43BCash & Equivalents$2.39BFree Cash Flow$1.26B

Financial Statements

FY2014 against FY2013

Line itemFY2014FY2013Change
Revenue$15.32B$14.58B+5.0%
SG&A Expenses$477.20M——
Operating Expenses$13.37B$12.76B+4.8%
Operating Income$1.94B$1.83B+6.5%
Interest Expense$177.20M$197.20M−10.1%
Net Income$1.10B$991.10M+11.4%
EPS (Basic)$4.27$3.73+14.5%
EPS (Diluted)$4.24$3.71+14.3%
Shares Outstanding (Basic)253.90M258.90M−1.9%
Shares Outstanding (Diluted)255.30M260.40M−2.0%

05—Questions

Frequently Asked Questions

  1. How did Omnicom perform financially in 2014?

    Revenue grew 5.0% to $15,317.8 million, operating income increased to $1,944.1 million, and net income attributed to Omnicom Group Inc. rose 11.4% to $1,104.0 million. Diluted EPS was $4.24, compared with $3.71 in 2013.

  2. What happened with the proposed Publicis merger?

    Omnicom and Publicis Groupe S.A. mutually agreed on May 8, 2014 to terminate their Business Combination Agreement dated July 27, 2013, citing difficulties in completing the transaction within a reasonable timeframe. No termination fee was payable by either party. Merger-related expenses were $8.8 million in 2014 and $41.4 million in 2013.

  3. How much is Omnicom's debt and how has its leverage changed?

    Total debt was $4,570.2 million at December 31, 2014, compared with $4,039.7 million a year earlier. Net debt rose to $2,179.9 million from $1,311.0 million, mainly due to principal cash uses in excess of sources, foreign cash translation effects, and non-cash swap-related changes. The Leverage Ratio was 2.0 times, within the covenant maximum of 3 times.

  4. What is management's outlook for 2015?

    Management expects 2015 revenue to increase modestly in excess of weighted average nominal GDP growth in its major markets, excluding foreign exchange. Foreign exchange rates at January 30, 2015 were expected to reduce 2015 revenue by approximately 5%.

  5. How much did Omnicom return to shareholders?

    Dividends paid to common shareholders were $468.0 million, and the company repurchased $1,063.0 million of common stock in 2014. Dividends declared per common share were $1.90, up from $1.60 in 2013.

06—Continue

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