Please ensure Javascript is enabled for purposes of website accessibility

Omnicom Group Inc. Communicates Another Strong Quarter

By Steve Symington - Feb 9, 2016 at 1:58PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The ad agency turned in another solid quarter despite continued macro and currency headwinds.

Omnicom Group (OMC -0.96%) released fourth-quarter 2015 results on Tuesday morning, and shares climbed more than 2% as the company once again demonstrated its ability to weather persistent foreign exchange headwinds.

Let's take a closer look at what the marketing and corporate communications specialist accomplished:

Omnicom results: The raw numbers


Q4 2015 Actuals

Q4 2014 Actuals

Growth (YOY)


$4153.3 million

$4195.1 million


Net Income (Available for Common Shares)

$331.6 million

$329.5 million


Net Income Per Share




YOY: Year over year. Data source: Omnicom Group.

What happened with Omnicom this quarter?

  • Omnicom's top line benefited from a combination of 5.3% organic growth -- which excludes currencies, acquisitions, and divestments -- and another slight increase in revenue from acquisitions.
  • That includes a 12.6% increase in advertising organic revenue, a 1.5% decline from CRM, a 6.9% decline from public relations, and a 5.9% decline in specialty communications.
  • On a regional basis in Q4, organic revenue grew 4.7% year over year in North America, 4.9% in the U.K., 3.5% in Euro Markets and Other Europe, 8.6% in Asia-Pacific, 0.4% in Latin America, and 5% in Africa/Middle East.
  • Organic growth was more than offset by a 6.6% negative impact from foreign currency exchange.
  • Omnicom generated more than $1.6 billion in free cash flow in 2015, helping fund the company's acquisitions and ambitious capital returns programs.
  • In 2015, Omnicom maintained its long-standing streak of returning more than 100% of net income to shareholders through dividends and repurchases:

Data source: Omnicom Group. 

  • Omnicom acquired Wednesday Agency Group, a leading integrative creative agency for the fashion, luxury, and consumer lifestyles industry. Wednedsay's primary focus includes fully integrated campaigns, content strategy, digital design and branding, and production.

What management had to say 
As Omnicom CEO John Wren said during the subsequent conference call:

[I]t was an excellent quarter for Omnicom. We recruited some of the best talent in our industry, continued to win significant new business, and made a couple of important agency acquisitions. It was terrific way to end the year. [...] We also achieved our margin and net income targets for the quarter and the full year despite significant strengthening of the U.S. dollar and an impact on revenue and [earnings before interest and taxes].

Looking forward 
Omnicom doesn't normally provide specific financial guidance, but Wren did elaborate during the call that foreign exchange in 2016 is expected to "continue to be a headwind on our revenue and earnings, but hopefully at a less significant rate."

In the end, it's evident Omnicom continues to hold steady its leadership position as it navigates the shift from traditional to digital advertising and all the while rewarding shareholders for their patience through aggressive capital returns. As we wait for for market conditions and economic weakness to improve, that's as much as investors can ask of this promising company.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Omnicom Group Inc. Stock Quote
Omnicom Group Inc.
$64.13 (-0.96%) $0.62

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.