omc-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-10551

OMNICOM GROUP INC.

(Exact name of registrant as specified in its charter)


New York			13-1514814
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)

280 Park Avenue, New York, NY			10017
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (212) 415-3600

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbols	Name of each exchange on which registered
Common Stock, $0.15 Par Value	OMC	New York Stock Exchange
0.800% Senior Notes due 2027	OMC/27	New York Stock Exchange
1.400% Senior Notes due 2031	OMC/31	New York Stock Exchange
2.250% Senior Notes due 2033	OMC/33	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April 11, 2023, there were 199,514,755 shares of Omnicom Group Inc. Common Stock outstanding.

OMNICOM GROUP INC.

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023

TABLE OF CONTENTS


PART I.	FINANCIAL INFORMATION	Page
Item 1.	Financial Statements
	Consolidated Balance Sheets - March 31, 2023 and December 31, 2022	1
	Consolidated Statements of Income - Three Months Ended March 31, 2023 and 2022	2
	Consolidated Statements of Comprehensive Income - Three Months Ended March 31, 2023 and 2022	3
	Consolidated Statements of Equity - Three Months Ended March 31, 2023 and 2022	4


	Consolidated Statements of Cash Flows - Three Months Ended March 31, 2023 and 2022	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
	Forward-Looking Statements	14
	Executive Summary	14
	Consolidated Results of Operations	17
	Non-GAAP Financial Measures	22
	Liquidity and Capital Resources	24
	Critical Accounting Estimates	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	27
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 6.	Exhibits	28
SIGNATURES		28

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

OMNICOM GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions)


	March 31, 2023		December 31, 2022
	(Unaudited)
ASSETS:
Current Assets:
Cash and cash equivalents	$	3,261.5	$	4,281.8
Short-term investments	87.4		60.7
Accounts receivable, net of allowance for doubtful accounts of $23.1 and $24.7	7,062.2		8,097.1
Work in process	1,508.9		1,254.6
Other current assets	975.2		918.8
Total Current Assets	12,895.2		14,613.0
Property and Equipment at cost, less accumulated depreciation of $1,205.6 and $1,167.5	884.0		900.1
Operating Lease Right-Of-Use Assets	1,077.2		1,165.0
Equity Method Investments	66.4		66.2
Goodwill	9,792.6		9,734.3
Intangible Assets, net of accumulated amortization of $834.9 and $819.9	300.3		313.4
Other Assets	221.9		210.5
TOTAL ASSETS	$	25,237.6	$	27,002.5

LIABILITIES AND EQUITY:
Current Liabilities:
Accounts payable	$	9,585.2	$	11,000.2
Customer advances	1,279.6		1,492.3

Short-term debt	18.5		16.9
Taxes payable	334.2		300.0
Other current liabilities	2,247.6		2,243.4
Total Current Liabilities	13,465.1		15,052.8
Long-Term Liabilities	839.9		837.5
Long-Term Liability - Operating Leases	890.7		900.0
Long-Term Debt	5,609.4		5,577.2
Deferred Tax Liabilities	439.6		475.7
Commitments and Contingent Liabilities (Note 12)
Temporary Equity - Redeemable Noncontrolling Interests	361.7		382.9
Equity:
Shareholders’ Equity:
Preferred stock	—		—
Common stock	44.6		44.6
Additional paid-in capital	580.7		571.1
Retained earnings	9,825.5		9,739.3
Accumulated other comprehensive income (loss)	(1,384.5)		(1,437.9)
Treasury stock, at cost	(5,949.7)		(5,665.0)
Total Shareholders’ Equity	3,116.6		3,252.1
Noncontrolling interests	514.6		524.3
Total Equity	3,631.2		3,776.4
TOTAL LIABILITIES AND EQUITY	$	25,237.6	$	27,002.5

The accompanying notes to the consolidated financial statements are an integral part of these statements.

OMNICOM GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In millions, except per share amounts)


	Three Months Ended March 31,
	2023		2022
REVENUE	$	3,443.3	$	3,410.3
OPERATING EXPENSES:
Salary and service costs	2,542.9		2,491.8
Occupancy and other costs	291.6		300.2
Real estate repositioning costs	119.2		—
Charges arising from the effects of the war in Ukraine	—		113.4


Cost of services	2,953.7		2,905.4
Selling, general and administrative expenses	89.2		96.7
Depreciation and amortization	53.9		55.2
Total Operating Expenses	3,096.8		3,057.3
OPERATING INCOME	346.5		353.0
Interest Expense	54.9		51.0
Interest Income	35.6		8.2
INCOME BEFORE INCOME TAXES AND INCOME (LOSS) FROM EQUITY METHOD INVESTMENTS	327.2		310.2
Income Tax Expense	83.4		115.5
Income (Loss) From Equity Method Investments	0.1		(0.1)
NET INCOME	243.9		194.6
Net Income Attributed To Noncontrolling Interests	16.4		20.8
NET INCOME - OMNICOM GROUP INC.	$	227.5	$	173.8
Net Income Per Share - Omnicom Group Inc.:
Basic	$	1.13	$	0.83
Diluted	$	1.11	$	0.83

Weighted Average Shares:
Basic	202.2		208.3
Diluted	204.5		209.8

The accompanying notes to the consolidated financial statements are an integral part of these statements.

OMNICOM GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In millions)


	Three Months Ended March 31,
	2023		2022
NET INCOME	$	243.9	$	194.6
OTHER COMPREHENSIVE INCOME:
Cash flow hedge:

Amortization of loss included in interest expense	1.4		1.4
Income tax effect	(0.4)		(0.4)
Cash flow hedge, net of tax	1.0		1.0
Defined benefit pension plans and postemployment arrangements:

Amortization of prior service cost	1.1		1.0
Amortization of actuarial losses	0.2		1.6
Income tax effect	(0.9)		(1.3)
Defined benefit pension plans and postemployment arrangements, net of tax	0.4		1.3
Foreign currency translation adjustment	51.8		28.1

Other Comprehensive Income	53.2		30.4

TOTAL COMPREHENSIVE INCOME

SEC Form 10-Q filed by Omnicom Group Inc.