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Omnicom posts high organic growth for Q3: CEO Wren is ‘bullish’ on adland’s rebound

Omnicom has released its results for the third quarter of 2021

Omnicom’s earnings for the third quarter of 2021 showed the holding company surging beyond both 2020 and 2019 numbers. The holding company boasted double-digit organic growth with bright spots including its customer relationship management offerings as well as its core media advertising business. The results build on the organization’s strong Q2 performance.

What do the results show?

  • Omnicom’s organic growth was up 11.5% in the third quarter. The company said it expects full-year organic growth to hit 9%.

  • Margins were up 15.8%, significantly outpacing growth during the comparable period in 2019. EBITDA margins are at 15.1% – a number that hasn’t budged since last quarter and executives predict will not fluctuate for the remainder of the year.

  • The company posted revenue of $3.44bn for the period, representing a 7.2% lift over last year’s $3.21bn.

  • Net income rose 13% compared to the same period last year and was up significantly from 2019.

  • The company cited revenue growth and expense control for driving an 8% increase in operating profits. Growing operating profit dollars will remain a top priority for the organization moving forward, executives said.

  • Earnings per share were up an impressive 33 cents compared to the third quarter of 2019.

  • The quarter’s major account win came last month, when Omnicom snagged Mercedes-Benz’s creative and media business, winning out over competitor Publicis Groupe.

  • During the third quarter, the company also made a handful of notable acquisitions. It bought out performance marketing agency Jump 450 Media and Berlin-based digital-focused creative agency Antoni, as well as German PR and communications agency Oliver Schrott Kommunikation, which specializes in automotive.

  • Omnicom Group’s chairman and chief executive officer John Wren said that the advertising giant hopes to make additional acquisitions in the near future and indicated it has several deals in the making.

  • Wren cited Omnicom’s workforce as a key driver of recent wins and overall growth, saying: “I often hear from clients that a deciding factor in their decision to hire Omnicom is... our people, who bring distinct, specialized skills... know and respect one another and genuinely collaborate.”

  • During the unprecedented challenges presented by the pandemic, he added, Omnicom’s workforce demonstrated “ingenuity, resilience and strength.” He noted that the company continues to invest in talent development and skills training.

Which regions and areas of the business performed best?

  • The company’s advertising, CRM precision marketing, CRM commerce and brand consulting, CRM experiential, CRM execution and support, communications and direct-to-consumer (D2C) offerings performed especially well during Q3. Growth in these and other areas was driven primarily by improved economic conditions, Wren noted.

  • In addition, the company’s healthcare discipline was up 6.6%. The practice area was Omnicom’s only area that saw positive organic growth during the heat of the pandemic and continues to perform particularly well.

  • In the US, Omnicom’s home base, organic growth was up 7.7%. The company’s advertising and experiential segments saw good growth in the US market, but witnessed lower margins compared to markets outside of the US.

  • As far as the company’s global business goes, all geographies posted positive growth for the period. Outside of the US, total organic growth saw a lift of 16%, led by Germany, the UK, Canada and Australia.

  • The practice area that saw the best overall growth outside the US market was experiential, which saw 100% total growth.

  • Moving forward, the company will continue to focus on talent. As part of ongoing efforts, the organization recently expanded its wellness and health programs internally as well as its diversity, equity and inclusion initiatives. Omnicom Group’s chief finance officer Phil Angelastro also noted that the company aims to invest further in its marketing, e-commerce, digital, performance media and data-driven insights offerings.

  • “Even during the pandemic, we accelerated the strength of our services... to deliver better outcomes for our clients and win new business,” said Wren. “I’m pretty bullish about the future,” he added, in an assessment of the advertising sector’s economic recovery.

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