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Omnicom Group Inc (OMC 1.42%)
Q4Â 2019 Earnings Call
Feb 11, 2020, 8:30 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Good morning, ladies and gentlemen. Welcome to the Omnicom Fiyrth Quarter 2019 Earnings Release Conference Call. [Operator Instructions].
At this time, I'd like to introduce your host for today's conference, Senior Vice President of Investor Relations, Shub Mukherjee. Please go ahead.
Shub Mukherjee -- Senior Vice President of Investor Relations
[Technical Issues].
John Wren, Chairman and Chief Executive Officer; and Phil Angelastro, Chief Financial Officer. We hope everyone has had a chance to review our earnings release. We have posted to www.omnicomgroup.com, this morning's press release along with the presentation covering the information that we will review this morning. This call is also being simulcast and will be archived on our website.
Before we start, I've been asked to remind everyone to read the forward-looking statements and other information that we have included at the end of our presentation. And to point out, that certain of the statements made today, may constitute forward-looking statements and that these statements are our present expectations, and that actual events or results may differ materially. I would also like to remind you, that during the course of the call, we will discuss some non-GAAP measures in talking about Omnicom's performance. You can find the reconciliation of those measures to the nearest comparable GAAP measures in the presentation materials.
We are going to begin this morning's call, with an overview of our business from John Wren. Then, Phil Angelastro will review our financial results for the quarter, and then we will open the line for your questions.
John D. Wren -- Chairman and Chief Executive Officer
Thank you, Shubh. Good morning. Thank you for joining the call this morning, I'm pleased to speak with you about our fourth quarter and the full year 2019 results. Our fourth quarter performance was very solid, with organic growth of 3.5%. For the year, organic growth was 2.8%. We also exceeded our margin targets for the quarter, and for the year. EBIT margin for the quarter increased 30 basis points to 15.6%. For the year, EBIT margin was up 40 basis points to 14.2%, excluding the effect of our third quarter 2018 dispositions and repositioning actions, and EPS for the quarter was up 6.8% to $1.89 per share.
In the face of a dynamic, yet challenging environment, I'm very pleased that our strategies, talent and execution have allowed us to consistently deliver solid financial results. I will speak more about our achievements in these areas, later in my remarks, but let me first provide more color on our financial performance. Looking at 4th quarter organic growth across our disciplines, advertising and media was up 5.1%. CRM Consumer Experience was up 3.3%. Healthcare was up 12.9%. PR was down 2.5% and as expected, CRM Execution & Support was down 6%. By region, the U.S. was up 2.8%, driven by solid results in advertising and media, and CRM Consumer Experience, and we had double-digit growth in healthcare. CRM Execution & Support was down double-digits in the U.S., and public relations also had negative growth.
U.K. was up 3.3% advertising and media, Healthcare and PR performed well, offset by weaker performance in both of our CRM disciplines. Overall growth in the Euro and non-Euro region was 4.7%. Results in the Euro markets was mixed, Germany and Spain performed well, France had negative growth, as it continued to be impacted by weak performance in our specialty print production business. Our events business was also negative, due to difficult comps. The non-Euro markets performed quite well overall, led by the Czech Republic and Russia. Asia Pacific growth was 4.5%, as China and Australia had good results in the quarter. Latin America was down 1.3%, due to challenges in Brazil and Chile. Our smallest region, the Middle East and Africa, was up 19.5%.
Looking at our cash flow in 2019, Omnicom generated $1.7 billion in free cash flow and returned more than $1.1 billion to shareholders through dividends and share repurchases. Approximately $120 million in cash was used for acquisition-related spend during the year. At this point, our acquisition pipeline is good, and we expect activity to pick up in 2020. Our plans for the use of free cash flow remains unchanged, paying our dividends, pursuing strategic acquisitions, and repurchasing our shares. Finally, our balance sheet and credit ratings remain very strong.
Turning now to our strategy and operations; we are focused on key strategic objectives, that have consistently served us well. These strategies are centered around hiring and retaining the best talent, driving organic growth by evolving and expanding our service offerings, investing in areas of growth with a particular focus on data, analytics, digital transformation, CRM and precision marketing, e-commerce and Healthcare. And remaining vigilant on managing our costs and improving operational efficiencies in areas such as real estate, accounting, purchasing and IT. To meet our clients' desire for simplicity and to be better able to recruit and deliver the best talent to them, we've structured our service offerings around our practice areas and our Global Client Leaders Group.
The Global Client Leaders Group provides clients a single point of access to our network of thousands of industry specialists in a variety of marketing disciplines. From late 2017 to early 2019, we established 12 practice areas, including CRM and Precision Marketing, advertising, media, public relations, retail, branding, healthcare, experiential and several others. The practice areas bring together strong expertise within a particular discipline, provide our people greater opportunities for training and development, better match the needs of our clients with our service offerings, and help develop strategies for internal investments and acquisitions.
Together, the Global Client and practice area leaders can deliver expertise and talent to our clients that is aligned with their business strategies and can tackle their marketing challenges. One of our long-standing practice areas, which is very well aligned with our Global Client Leaders Group, is Omnicom Health Group. This group had an outstanding year, which contributed to our overall growth in 2019. Omnicom Health Group is one of the largest healthcare communications groups in the world. The Group services over 250 different client companies, including the top 25 pharma and biotech companies in the world. Omnicom Health Group is able to manage communications across the entire healthcare ecosystem, due to its breadth and depth of specialty healthcare agencies, that are focused on four key healthcare customers; healthcare professionals, payer organizations, patients and consumers, and medical experts and regulatory stakeholders.
The Group's success is driven by its talent. In 2019, the group added 300 healthcare specialists to its roster, which now numbers more than 4,300 people Omnicom Health Group has invested in training and upscaling its people in healthcare marketing, through programs such as its Oncology University. The Group's success is also due to its use of our data and analytical tools. Over the past year, it has begun to use Omni, our people based precision marketing and insights platform, to better understand healthcare professionals and patients' online behavior. In doing so, Omnicom Health Group has successfully created more insightful, targeted and personalized communication strategies for its clients. All our agencies have access to our data and analytics tools, which we have invested in for over a decade. Omni is now available globally in the majority of markets in which we operate.
Omni's open platform allows us to continually evolve and expand its capabilities to serve the specific needs of our agencies and clients. As an example, our pioneering cultural consultancy, sparks & honey recently launched Q, a first of its kind SaaS platform, that combines human and AI powered intelligence, to help organizations predict change before it disrupts their business. The capabilities of Q are fully embedded within Omni.
While data and analytics remain a top investment and priority for us, we understand that data can only take us so far. It is our IP and our creativity that truly sets us apart. It is creativity and innovation, informed by data and analytics, that will drive the most meaningful business results. One barometer we use to measure our success in cultivating the best talent and the strength of our agency brands, is the performance of our client work in award shows. Here are a few recent highlights; Omnicom was named Holding Company of the Year by MediaPost for the second year in a row, while BBDO won Agency of the Year. The Eurobest 2019, two of our networks are in the top three, with BBDO coming in first and DDB coming in third. In addition, Abbott Mead Vickers BBDO took the top spot for Agency of the Year and DDB Paris came in second. PHD also won Media Network of the Year for the second year in a row. Critical Mass was named customer engagement Agency of the Year and campaign U.S. Agency of the Year Awards. In the PRWeek's inaugural purpose awards, Porter Novelli was named Agency of the Year. None of these awards would have been possible, without our top notch agency brands. Their rich history and well-established cultures have shaped our industry for decades, and we applaud the award winning work they create year after year for our clients
We remain steadfast in believing in the value of our individual brands, and will continue to support their unique cultures, and go-to-market strategies. It is the people within our agencies who make Omnicom what it is today, and our commitment to attracting, retaining and developing talent remains our top priority. This includes fostering diverse and inclusive workplaces, where all employees feel comfortable, confident and supported. While this is a long-standing and continuous effort, 2019 set several milestones that highlight our dedication and commitment.
In 2019, we were recognized by Fortune magazine as one of only six Fortune 500 companies that have more women than men on its Board of Directors. The Wall Street Journal also recently released its own diversity and inclusion ranking of companies and the S&P 500, and I'm proud to say that we were tied for third. In addition, Omniwomen, our employee resource group, continue to serve as a catalyst for increasing the influence and number of women leaders throughout the Omnicom network. The program currently has 14 chapters globally, and will be hosting several events across the globe in honor of the upcoming International Women's Day on March 8.
In May 2019, we launched Open Disability + Allies. The launch of this group went hand in hand with our ongoing strategic partnership with Valuable. 500, a global initiative putting disability inclusion on business leadership's agenda. Finally, for the fourth consecutive year, Omnicom received a perfect score on the Corporate Equality Index conducted by the Human Rights Campaign, which highlights our commitment to and inclusive workforce and designates us as a 2020 Best Place to Work for LGBTQ Equality. I'm extremely proud of our leadership teams and all our people for these achievements.
In addition to our employee resource groups, we continue to invest in our talent development programs. In December, we announced the appointment of Karen Van Bergen as Dean of Omnicom University, our long-standing management development program. Karen, previously served as CEO of Omnicom's PR group. 2019 marked the 25th anniversary of this prestigious program, from its modest beginnings in Boston, with only one program we've expanded Omnicom University to 12 programs a year on three continents, nearly 5,400 global alumni. It is considered one of the pre-eminent professional development programs in our industry. Our strong financial performance underpins the outstanding work of our people and agencies. We look forward to continued success in the year ahead. In closing, we are pleased with our performance for Q4 and the full year 2019, and I'm confident that we are very well positioned as we enter 2020.
I will now turn the call over to Phil for a closer look at the results.
Philip J. Angelastro -- Executive Vice President and Chief Financial Officer
Thanks John and good morning. John just described, the fourth quarter results represented a very solid end of the year for us, reflecting the quality of our employees and the services they deliver to help our clients achieve their goals. And for the full year, our results were in line with the upper end of the range of our expectations. As always, our agencies remain focused on responding to our clients' ever changing requirements, and delivering effective solutions to meet their needs, and at the same time managing their agency cost structures in an efficient manner. We also continue to see the positive effects of our ongoing companywide efforts to identify opportunities for improvement and efficiencies.
Starting on slide 7, regarding our revenue for the fourth quarter; we had organic growth of 3.5%, as our agencies overall did a good job, capturing year end client project spend. For the full year, organic growth was 2.8%, which was at the upper end of the range of our expectation of 2% to 3% growth, as we had positive performance across most regions and major markets. FX was once again negative reducing our revenue by 0.9% in the fourth quarter. And while a reduction in revenue from dispositions made during the last 12 months exceeded revenue from acquisitions in the quarter, the net reduction of 1.2% this quarter is lower than it was in the previous four quarters, as we cycle through the largest tranche of our 2018 dispositions, during the third quarter.
As a result, our reported revenue in the fourth quarter increased 1.3% to $4.14 billion when compared to Q4 of last year. I will discuss the components of the changes in revenue in more detail later in my comments.
Turning back to slide 1, our operating profit for the quarter was $646.4 million, up 3.1% when compared to Q4 of '18, while our operating margin of 15.6% represented a 30 basis point increase over last year's fourth quarter. EBITDA for the quarter increased 2.5%, and Q4s EBITDA margin of 16.1% was up 20 basis points when compared to last year. Improvement in margins when compared to Q4 of last year primarily resulted from the change in business mix we've experienced from the strategic disposition of several non-core or underperforming agencies, and our ongoing efforts to be more efficient throughout the organization, particularly in the areas of real estate, back office operations, IT and procurement.
Net interest expense for the quarter was $38.6 million, down $14.5 million versus Q4 of last year, largely driven by the refinancing activity that took place in the third quarter of 2019 and down $10.7 million compared to the third quarter of this year. As a reminder, I'll recap the refinancing activity. In early July, we issued EUR1 billion senior notes in two parts. We issued EUR500 million of eight year senior notes due in 2027, at an effective rate of 0.92%, and an additional EUR500 million, 12-year senior notes due in 2031, at an effective rate of 1.53%. Together the Euro note issuance, after deducting the underwriting discount and offering expenses, resulted in net proceeds of $1.1 billion, at an average rate of 1.23%.
Proceeds were used to retire the $500 million of 6.25% 2019 senior notes, which came due in mid-July, and to retire on August 1st, $400 million of the 4.45% 2020 senior notes through a partial redemption. As a result of the refinancing activities, our expected ongoing long-term debt portfolio will be comprised of $4 billion in dollar-denominated debt, and EUR1 billion in euro-denominated debt. In addition, with the drop in long-term interest rates, we settled our fixed to floating rate interest swaps for a small gain. As a result, our debt portfolio is now 100% fixed rate debt at very attractive rates, an effective rate of approximately 3.3% and total third party interest expense for the fourth quarter decreased by $15.2 million, when compared to Q4 of 2018. In addition, interest income decreased $1.8 million period-over-period, as the reduction in interest rates on our cash deposits over the past year more than offset the increase in our cash balances.
When compared to the third quarter of 2019, interest expense decreased $10.8 million, driven by the refinancing activity in the third quarter, while interest income was flat. Note, gross interest expense in Q4 was approximately $7.6 million lower than in Q3, because Q3 included incremental net interest expense recorded as a result of the early redemption of $400 million of the 2020 senior notes.
For the full year 2020, we expect net interest expense savings of approximately $20 million, primarily from the refinancing activity when compared to 2019's reported results. However, total interest expense for 2020 and going forward will be subject to changes due to the translation of interest expense into U.S. dollars, related to the euro notes that we issued in 2019. Our effective tax rate for the fourth quarter was 26.1%, bringing the 2019 full year effective tax rate to 26%. As previously discussed, the annual rate for 2019 includes a benefit of approximately $11 million, resulting from the favorable settlement of uncertain tax positions in Q2 of 2019.
Heading into 2020, we expect our effective tax rate to be in the range of 26.5% to 27%, before considering the impact of the tax effect from our share-based compensation, including the impact of any future stock option exercises, both of which are subject to changes in the value of Omnicom stock price.
Earnings from our affiliates were less than $1 million for the quarter, down versus Q4 of last year, primarily due to lower earnings at our affiliates, as well as a negative impact of FX. And the allocation of earnings to the minority shareholders in our less than fully owned subsidiaries was up $4.3 million to $34.8 million during the quarter, due to the strong performance from several of our less than fully owned agencies. As a result, net income for the fourth quarter was $415 million, up 4% or $15.8 million when compared to Q4 of 2018.
Now turning to slide 2; our diluted share count for the quarter decreased 2.8% versus Q4 of last year to 219.3 million shares. As a result, our diluted EPS for the 4th quarter was $1.89, which is an increase of $0.12 or 6.8%, when compared to our Q4 EPS for last year.
Next, I'll provide a quick recap of the summary P&L EPS and other information for the full year results. As a reminder, in the third quarter of 2018, we closed on the disposition of Sellbytel, as well as other dispositions that resulted in a net pre-tax gain of $178 million. At the time, we also recorded charges of $149 million, repositioning actions, primarily resulting from severance and lease terminations. And lastly, we recorded additional tax expense of approximately $29 million, resulting from adjustments of the provisional amounts originally recorded in connection with the 2017 Tax Act.
As we reported last year, the net impact of these items on our full year 2018 results, increased our reported operating profit by $29 million, net income by $18.2 million and diluted earnings per share by $0.08. Therefore on slides 5 and 6, we presented the fiscal '19 results in comparison to 2018, both with and without the impact of the net gain from dispositions, the repositioning charges, and the tax adjustments in connection with the Tax Act. The non-GAAP adjusted amounts for these items, show how our underlying business performed year-on-year on a comparable basis, which we believe is a meaningful presentation for investors, and is consistent with how management measured our 2019 operating performance.
Since the full-year results for 2019 were in line with our quarterly performance, I'll just give you a few headlines. Organic revenue growth for the full year was 2.8%, which was in line with the upper range of our expectations for the year, of between 2% and 3%. FX translation decreased revenue by 2.1%, and the net impact of acquisitions and dispositions reduced revenue by 2.9%.
So for 2019, our reported revenue totaled $14.95 billion, a decrease of 2.2% compared to 2018. Our reported operating profit for 2019 was $2.12 billion, down slightly when compared to our reported results last year, while operating margin improved 20 basis points year-over-year to 14.2% on a reported basis and 40 basis points after adjusting 2018's operating income, with the net gain from the dispositions and repositioning actions we undertook during Q3 of 2018.
In our full year reported diluted EPS for 2019 was $6.06 a share, up $0.23 or 3.9% compared to the reported amount of $5.83 a share in 2018. Adjusting for the impact of 2018's net gain from the dispositions repositioning actions and tax reform activity, 2019's diluted EPS represents a $0.31 improvement or 5.4% over the 2018 non-GAAP adjusted amount of $5.75 a share.
Turning to the details of our revenue performance in the fourth quarter, starting on slide 7; FX once again was negative in the quarter, but not as negative as the impact we saw in the first nine months of the year. FX reduced revenue by 9/10 of a percent in the fourth quarter, were $37 million. This impact remains fairly widespread. On a reported basis, consistent with the year-over-year impact dollar strengthened against practically every one of our major foreign currencies. In the quarter, only the Japanese yen and Russian ruble strengthened against the dollar. The FX movements creating the largest reductions in the quarter, continue to be from changes in the dollar compared to the euro, Chinese yuan, Brazilian real, and the Australian dollar.
As for our projection of the FX impact for the upcoming year, any assumption as to how foreign currency rates will move over the next few months, let alone the balance of 2020, at this point is speculative. But if currencies stay where they currently are, based on our estimates, FX could reduce our reported revenues by approximately 50 basis points in the first quarter, and be slightly negative over the balance of 2020.
The impact of our recent acquisitions, net of dispositions decreased revenue by $51 million in the quarter or 1.2%. This is lower than earlier quarters, as we cycled through much of our recent disposition activity during the third quarter of 2019. Based on transactions completed to date, we estimate the impact of our acquisition activity, net of dispositions will be a net reduction of about 75 basis points in the first quarter of 2020, and close to flat over the remaining three quarters of the year, resulting in a projected negative impact of 25 basis points for the year.
And finally, our organic growth for the quarter was 3.5%. Growth this quarter was fairly well distributed and reflective of the positive effects of year-end client project spending. Geographically, our domestic Asia Pacific and European regions all had good performances. Within our service disciplines, our advertising media and CRM Consumer Experience agencies all experienced positive organic growth this quarter. While our CRM Execution & Support and PR agency group once again lagged.
Slide 8 shows our mix of business by discipline; for the fourth quarter, the split was 58% for advertising and 42% for marketing services. As for their organic growth by discipline, our advertising discipline was up 5.1%. We saw solid performances from our global advertising agency networks, and several of our regional brands, as well as solid performance that our media businesses. CRM Consumer Experience was up 3.3% organically, driven by continued strong growth from our precision marketing agencies, as well as from our events businesses outside the U.S. CRM Execution & Support was down 6% this quarter, across most of the service offerings and discipline. PR was down 2.5%. The reduction is consistent with the performance of our PR discipline throughout earlier quarters in 2019. Lastly, Healthcare was up double-digits organically at 12.9%, and the growth continues to be well distributed, both domestically and internationally. On slide 9, which details the regional mix of business, you can see during the quarter, the split was 52% in the U.S., 3% for the rest of North America, 9% in the U.K., 19% for the rest of Europe, 11% for Asia Pacific, 3% for Latin America and 3% for the Middle East and African markets.
Turning to the details of our performance by region on slide 10; organic revenue growth in the fourth quarter in the US was 2.8%, led by our CRM Consumer Experience, Healthcare and advertising media disciplines, with our CRM Execution & Support and PR agency group lagging.
Outside the U.S., our other North American agencies were down 2.3%, due to the sluggish performances at our advertising and media businesses. Our U.K. agencies were once again positive, up 3.3%, driven by the strong performance of our advertising, PR, Healthcare and field marketing agencies. The rest of Europe was up 4.7% organically in the quarter.
In the Eurozone, we saw a solid performance across most markets; the strongest being Germany, Belgium, Portugal and Spain. The Netherlands was slightly positive in the quarter, while France was once again negative driven by continued weak performance in a few of our CRM Execution & Support businesses in that market. Organic growth outside the Eurozone also continues to be positive across most markets. Organic growth in Asia-Pacific for the quarter was 4.5%. Our Greater China agencies performed well this quarter, after coming off a poor performance in Q3, primarily driven by growth from our media and events agencies on the Mainland. However, we do not expect this to continue in the first half of 2020, given the uncertainty in China.
Elsewhere in the region, we saw somewhat mixed performance by market. Solid performance by our agencies in Australia, South Korea, and Thailand was partially offset by reductions in Japan and Singapore. Latin America was down 1.3% organically in the quarter. Brazil once again returned to a negative organic performance, as did Chile and Colombia, offsetting some growth in Mexico in the quarter. And lastly, the Middle East and Africa, which is our smallest region, was positive for the quarter, with Qatar and the UAE turning in strong performances.
Turning to slide 11, we present our mix of revenue by our client's industry sector. As we saw throughout the year, when comparing the full-year revenue for 2019 to 2018, there was a small shift in our mix. As a result of the Sellbytel disposition, the mix of revenue from technology clients has been reduced.
Turning to our cash flow performance, on slide 12, you can see that for the year, we generated $1.73 billion of free cash flow, diluting changes in working capital. As for our primary uses of cash on slide 13, dividends paid to our common shareholders were $564 million, up about $16 million year-over-year. As you recall, we increased our quarterly dividend by $0.05 a share, effective with April's payment. The increase in the cash payment was partially offset by a reduction in common shares over the past 12 months.
Dividends paid to our non-controlling interest shareholders totaled $97 million, down versus the prior year, due to a combination of dispositions and the repurchase of shares from our minority shareholders. Capital expenditures were $102 million year-to-date, down compared to 2018, primarily due to reduction in leasehold improvements from our real estate activities, year-over-year. Acquisitions, including earn-out payments totaled $124 million. As we've mentioned previously, this is a decrease when compared to last year, when we opportunistically executed on several acquisitions. And stock repurchases, net of the proceeds received from stock issuances under our employee share plans were $604 million. All in, we generated $239 million in net free cash flow over the past year.
On page 14, we present our capital structure as of year-end, which reflects the changes we discussed earlier, regarding the refinancing actions we took in the third quarter. Regarding our capital structure at the end of the year, our total debt was $5.14 billion, and our net debt position as of December 31st was $835 million, down almost $400 million from this time last year. Year-on-year, the improvement in net debt is primarily due to our positive free cash flow of $239 million, and changes in operating capital of $125 million, which includes the year-over-year improvement of $45 million on our working capital management. As for our debt ratios, they remain solid. Our total debt-to-EBITDA ratio was 2.2 times and our net debt to EBITDA ratio was 0.4 times, and our interest coverage is 10.4 times, which has improved over the past year, due to the reduction in our interest expense.
And finally on slide 15, you can see, we continue to manage and build the company through a combination of well focused internal development initiatives, and prudently priced acquisitions. For the last 12 months, our return on invested capital ratio was 29.5%, while our return on equity was 49.6%
And that concludes our prepared remarks. Please note, that we've included several other supplemental slides in the presentation materials for your review. But at this point, we're going to ask the operator to open the call for questions. Thank you.
Questions and Answers:
Operator
[Operator Instructions]. Our first question will come from the line of Alexia Quadrani from JP Morgan. Please go ahead.
Alexia Quadrani -- JP Morgan -- Analyst
Thank you very much. My first question is really more detail on the outlook for 2020. If you can give us a sense of how we should be thinking about organic growth and then the margin efficiencies that you have highlighted that benefited Q4, and actually full year 2019, can they continue in 2020? How we should think about profitability as well? Thank you.
Philip J. Angelastro -- Executive Vice President and Chief Financial Officer
I'll start and then John can add his comments. I think I think for 2020 in terms of where we are with our planning cycle for the year right now, our expectations are similar to what they were at this point in 2019. So we see an organic growth range of 2% to 3% again for 2020, and with respect to margins, we're going to continue to focus on growing EBIT dollars, that has been our focus all long. That's how we approach planning and executing on our business, and it has been successful. We're always looking for opportunities for improvement and efficiencies throughout the organization. More particularly focused or have been the last three or four years in the areas of real estate and back office and IT. We're going to continue to do that and at the same time, we're going to continue to invest for growth, especially in the areas of of data and analytics, training and some other initiatives as we always strive to find the right balance between those investments and finding sustainable growth.
So for 2020 at this point in our planning cycle, we expect margins to approximate what they were in 2019 so flat for now and we'll see how it goes as the year evolves.
Alexia Quadrani -- JP Morgan -- Analyst
And John, can I ask a follow-up question is, you touched on or maybe Phil touched on China or Asia region in your opening remarks, I'm curious, I know it's not a huge market for you, but how are the multinationals sort of dealing with added spending in China right now? And then just a last question for Phil or John, the CRM execution business, which continues to be a tough area for you, do you see more divestitures or opportunity to sort of -- I guess what's the -- how do we fix that business? Do we get out of some of the businesses or is it a question of sort of just cyclical and it will come back?
John D. Wren -- Chairman and Chief Executive Officer
First Alexia, with respect to China, we like most other people, are playing in day to day at this point. Our primary focus is the safety of our employees. January, which we know the results were fine. It wasn't until after that, that it just became a full-blown crisis. It depends on how long it goes on. People have been working primarily from home, and work goes on for most clients, some are really spending more, because of the products that are selling to the marketplace. The one area for the quarter anyway that I think will be affected, will be our events business in China, because any planned events have been canceled at this point, and we don't know if they will be done later in the year or whatever. But as you said in your comments, China is an important market, but it's not a terribly large market for us and our numbers.
And your second question...
Alexia Quadrani -- JP Morgan -- Analyst
On the CRM execution. Just a question, if did more divestitures there or what's your outlook really?
Philip J. Angelastro -- Executive Vice President and Chief Financial Officer
Sure. Yeah, I think we're going to continue to look at the entire portfolio, as we go through our planning process and all throughout the year. So identify businesses that strategically make make sense for disposition. We've been through, we believe we've been through the bulk of that process as far as acquisitions of size. But we're always open to reconsiderations, and there's a lot of change that's happened in our industry. We expect that change to continue. We don't have any particular meaningful businesses targeted for disposition at this point, and we think a bunch of the Execution & Support businesses that we have, are going to get back to being positive growth, maybe not high growth businesses with good returns, with some exceptions. There are some that are still cycling through some of the issues that they faced in 2019. But the part of the portfolio it represents is a smaller part of our portfolio now, than it was over the last few years. And some of those businesses are really good businesses and have always been. They've been overshadowed by some of the underperformers within that group or grouping. So I think you can expect, we're going to continue to work with the management teams to look for opportunities for growth and improvement, and to the extent that we feel strategically, we're not going to continue to invest in them and they're not -- and they are opportunities for good returns for disposition, we may continue to to consider going down that route too.
Alexia Quadrani -- JP Morgan -- Analyst
Thank you very much.
Operator
Our next question then will come from the line of Craig Huber from Huber Research Partners. Please go ahead.
Craig Huber -- Huber Research Partners -- Analyst
Good morning. Thank you. I got a few questions. Can you just size for us if you would, the China revenues for last year, what percent of revenues it was, and what was your organic revenue there? We get that question a lot.
Philip J. Angelastro -- Executive Vice President and Chief Financial Officer
The size of China for us is -- it's probably a little bit less than 1.5% of our revenues, and and I think given that size, we typically don't disclose every country-by-country organic revenue growth percentage, but if you give me a minute, I'll just double check it. So for the year, China's organic growth was negative. So you know I think in the mid-single digits in 2019.
Craig Huber -- Huber Research Partners -- Analyst
Thank you for that. My next question, John, I guess your various conversations you've had with your larger customers, particularly here in the U.S. Just curious, what are the tone of businesses with them, and as you sort of think about the U.S. economy, what's your sort of a sense of that? Is it holding you back? Is it helping you? And the same questions for Continental Europe as well, what's your sense of the economy in both places please?
John D. Wren -- Chairman and Chief Executive Officer
Sure. Most of the conversations we've had -- I've had with clients in the U.S., the US economy continues to be strong and clients are trying to take advantage of the growth that they see in the marketplace. Obviously with the election coming up, there is some cautiousness that goes along with that. But for the most part, I'd say its a net positive. Once you get into Europe, the market -- it changes market by market. The real behind the scene conversations about Brexit is uncertainty. Not so much for 2020, but post 2020, as businesses decide where they have to be positioned and what it needs to get done.
France is -- so the market is OK, we've suffered an individual loss in some of our execution businesses, which affect our numbers. But the market is OK. And Germany; Germany is a question mark at this point. Not a negative, but a question mark, especially since I think it was last night, the expected successor to Angela Merkel, decided she would not be running for that position. So we don't have any better information at the moment.
Russia continues to be a strong performing market for us, and I don't know if that covers most of the things you wanted me to cover.
Craig Huber -- Huber Research Partners -- Analyst
I appreciate that. Every year in the fourth quarter, you tend to have some variability on your project related work obviously here in the fourth quarter. Can you maybe size that for us, in terms of dollars, maybe how you want to do it, the fourth quarter this year versus last year, please?
Philip J. Angelastro -- Executive Vice President and Chief Financial Officer
I think we typically see, as we head into the fourth quarter, somewhere around $200 million or $250 million of project work that is typically available for our agencies to achieve and our agencies do typically achieve something in that range. Some years it's a little bit lower, some years, they actually do a little bit better. And there's a whole variety of factors and it's not just when we speak about that in the fourth quarter, it's not just our project-based businesses alone, that are actively pursuing year end project opportunities with their clients.
So I think this year, it was probably similar to, maybe a little bit better than last year's fourth quarter. And I think if you go back to '18, it probably wasn't as good a performance, where there wasn't as much of it that we were able to convert in that fourth quarter. But that's a typical range that we see, it's hard to actually put your finger on every dollar and whether where -- what exactly the client situation was, that led to us being able to capture those dollars. But that's traditionally what we found, that it has been pretty consistent over the years.
Craig Huber -- Huber Research Partners -- Analyst
That's it, thank you very much.
Philip J. Angelastro -- Executive Vice President and Chief Financial Officer
Sure.
Operator
Our next question will come from line of Dan Salmon from BMO Capital Markets. Please go ahead.
Daniel Salmon -- BMO Capital Markets -- Analyst
Thanks for taking the questions and good morning, everyone. John, I was hoping you could comment on the recent news about Accenture reportedly closing their media auditing division? You commented I think on that specific issue on prior calls, and love to hear an update on that specifically. But really more importantly, I'd love to hear, just your broader thoughts, particularly as you enter 2020 about the competitive environment and particularly with that group? And then just, you mentioned all the sort of success at the Healthcare division and the numbers are clearly robust there. I hate to ask about, what are the markets that are seeing challenges, but I'd just love to hear an update on the PR division. In particular just, we know that that's a business where, it might have lagged in adopting technology within marketing traditionally, but where it does appear to be really picking up. And I'm wondering how you see the role of technology and helping bring that division back to growth going forward this year. Thanks.
John D. Wren -- Chairman and Chief Executive Officer
Well, first, on Accenture, I did comment, I forget when it was back a while ago that some of their ambitions and the fact that they're still in the media auditing business was inconsistent. And I'm just happy to see that they got out of the business. And we'll continue to compete with them where we see them. Although we haven't run into them very often on major pitches. Your second question was about Healthcare, and could you just reframe it for me for a second?
Daniel Salmon -- BMO Capital Markets -- Analyst
Rather, you emphasized the strength in Healthcare. What I was hoping to just hear a little bit more about was the PR division and how you aim to get it back to growth? And in particular, the role of technology and whether you're seeing that become more significant within those businesses?
John D. Wren -- Chairman and Chief Executive Officer
Sure. Well, I think the utilization of Omni and especially Q, which I mentioned in my remarks, will benefit PR business in some of their assignments. The other activity that's going on -- now let me frame it, even though, we've had some difficulty with a couple of percentage points loss here and there, the profitability of the PR division has been and remains very strong. So the opportunity is a marketplace opportunity, it's not anything structurally to do with the business at this point.
And we're continuing to go through and evaluate. Recently, John Doolittle took over for Karen van Bergen as the head of that practice area. And we're sitting down and taking into the hard look at where we get our revenue, what we can expect in the future and what changes we want to make to the business. So it's an opportunity from my perspective, it's not really a problem. It's just constantly running 1% or 2% below the prior year. And technology will help that as well. Q especially, which has just been -- it's been in development for over 5 years, but it's just been added to the Omni offering. I believe will particularly help the PR business in some of the things that they're doing.
Daniel Salmon -- BMO Capital Markets -- Analyst
Great. Thank you.
John D. Wren -- Chairman and Chief Executive Officer
Sure.
Operator
Our next question then will come from the line of Julien Roch from Barclays. Please go ahead.
Julien Roch -- Barclays -- Analyst
Yes. Hi, there. Thank you very much for taking the questions. Coming back on China quickly. You said it was less than 1.5% of revenue and that so far the only impacts were you events business, because no event was taking place in China. How much is events either out of the Chinese revenue or out of the 1.5%? That's my first question. The second one is could you give us some color on the organic growth of your media practice in full year 2019? You said it was solid. It's one of your largest practice, and it's been the growth engine of agency in the last few years. So organic would be great, and if you don't want to give a precise number, maybe a range, I don't know, 2.5% to 5% or 5% to 7.5%? And then last question is on the number of shares. It was flat in Q4. Well, it usually goes down by about 1-plus million a quarter. So what happened in terms of number of shares in Q4? Thank you.
John D. Wren -- Chairman and Chief Executive Officer
I'll let Phil answer some of these. Are you applying for a job? Because some of the detailed questions are probably questions a few employees that actually look at it. We are not in the business of segregating our businesses in a particular market. We haven't done in the past, but our events business -- our main business is Media, Advertising and Public Relations in that market. Events add something to it, but I'm not going to get into the dissection of that for disclosure. So I apologize for that. But what was the second? The -- go ahead.
Julien Roch -- Barclays -- Analyst
And then -- no, I mean, if you knew that, I just wanted to have an idea of the growth of media in 2019?
Philip J. Angelastro -- Executive Vice President and Chief Financial Officer
I think overall, it wasn't disproportionately higher or lower than our overall growth rate. I think, if you go through the numbers we've been through on the call. You can see Media, Advertising and Healthcare grew better than the overall portfolio, and some of the overall portfolio, namely PR, CRM Execution & Support, in particular, either didn't grow. So by that, you can include the 3 that did grow or the primary drivers of our growth grew at a little bit higher rate than our overall average rate for the quarter and the year. And I think, each of those businesses had a good year and did well and drove our growth overall. But as far as the specific percentages, I think, we provide quite a bit of information to give you a good sense of that. But I don't think there're any dramatic -- anything dramatically different about that part of our portfolio.
And some of our Media business is actually in like markets such as Brazil and some others are integrated into the advertising businesses. They aren't stand-alone media businesses, so it's hard to pull out exactly how much of the growth in those markets came from stand-alone media versus advertising, because they are integrated. And as far as shares go, in the fourth quarter, I'm not quite sure I follow in detail your observation. But we can go through that after the call. I think certainly we bought back through share repurchases as little bit more in the fourth quarter this year than we did in the prior year. And maybe what you're seeing has something to do with just the way the year-end averages get complied. And we haven't seen the effects just yet.
Julien Roch -- Barclays -- Analyst
Oh, is that just the timing, because 219.3 diluted number of shares in Q4 and you had 219.4 in Q4? So it's just the timing of the average then?
Philip J. Angelastro -- Executive Vice President and Chief Financial Officer
Yes, yeah, you kind of -- you will see I think more of that or an acceleration of that effect when you get into 2021as the averages start over.
Julien Roch -- Barclays -- Analyst
Okay, very clear. Thank you very much.
Philip J. Angelastro -- Executive Vice President and Chief Financial Officer
Sure. I think given when the markets open, we probably have time for one more call -- one more question.
Operator
Thank you. Our final question then will come from Adrien de Saint Hilaire from BoA. Please go ahead. One moment, please go ahead.
Adrien de Saint Hilaire -- Bank of America Merrill Lynch -- Analyst
I'll try and be quick. Thank you very much. So first of all on the Chinese points, you said it was down mid-single-digits. I'm just curious if you have any explanation why it is indeed down mid-single-digits in an economy which is still growing 5% to 6%. Second question is on your expectations around the phasing out of cookies at Google. Do you think that's bad news in the short-term, good news in the long-run, or maybe the other way around or is that good news in all cases? And then, lastly, about your performance in the Middle East, should we expect some carry over into the first half of 2020 as well? Thank you very much.
Philip J. Angelastro -- Executive Vice President and Chief Financial Officer
I'll take the China question. I think -- our growth this year in China was largely due to some performance challenges. I think we lost a couple of clients. And frankly, as a portfolio, our agencies, with some exceptions, but our agencies didn't perform as well as they did the year before frankly. I think the current situation presents a very different set of challenges. So until we get some more clarity and so the situation resolves itself, I think our expectations are similar to everybody else is there is just little bit too much uncertainty to have a clear picture as to how it's going to roll out in China. And in the Middle East, I think we've got some good businesses that we expect to continue to grow. But as an overall percentage of Omnicom's portfolio and Omnicom's growth, we don't expect that to be significant or meaningful. But it's been a nice part of our portfolio and we've got some nice businesses over there that have been doing well and we certainly expect them to continue to do well.
John D. Wren -- Chairman and Chief Executive Officer
With respect to your first question regarding cookies, honestly, we've been expecting this for some time now. It's not new news to us. It will make targeting a little bit more challenging than it was in the past. Then it certainly will make Google stronger. But in anticipation of it, that's why we work so diligently on the creation of Omni and the enhancements that we made to it. In the future, it's not just going to be the data, it also has a lot to do with the execution, which you actually do with that data and how you process it. Clients, other people have other sources, which we can get access to from first-party data, which can be used to accomplish many of the objectives that were made a little bit easier with cookies.
Adrien de Saint Hilaire -- Bank of America Merrill Lynch -- Analyst
So you don't expect any impact on your media activities, just to be clear from that news?
John D. Wren -- Chairman and Chief Executive Officer
Very minor. But I expect, because we've been adjusting and we've been anticipating this for some period of time. There will be changes to everything. What happens today will be different to what happens tomorrow. But we're not threatened by it. And it makes us more valuable.
Philip J. Angelastro -- Executive Vice President and Chief Financial Officer
Yeah, the more complexity there is in the marketplace, the more clients need our expertise and need us to help them solve some of the challenges that this creates for them, not just for us.
Adrien de Saint Hilaire -- Bank of America Merrill Lynch -- Analyst
Many thanks.
John D. Wren -- Chairman and Chief Executive Officer
Good.
Philip J. Angelastro -- Executive Vice President and Chief Financial Officer
Okay. Thank you everybody for taking the call and for joining us and have a good rest of the day.
John D. Wren -- Chairman and Chief Executive Officer
Thank you.
Operator
[Operator Closing Remarks].
Duration: 60 minutes
Call participants:
Shub Mukherjee -- Senior Vice President of Investor Relations
John D. Wren -- Chairman and Chief Executive Officer
Philip J. Angelastro -- Executive Vice President and Chief Financial Officer
Alexia Quadrani -- JP Morgan -- Analyst
Craig Huber -- Huber Research Partners -- Analyst
Daniel Salmon -- BMO Capital Markets -- Analyst
Julien Roch -- Barclays -- Analyst
Adrien de Saint Hilaire -- Bank of America Merrill Lynch -- Analyst
