After closing 2015 on a fairly good note, Omnicom Group’s worldwide revenue in the first quarter of 2016 has increased 0.9 percent to USD 3,499.1 million from USD 3,469.2 million in the first quarter of 2015.
Across the regional markets, organic revenue in the first quarter of 2016 increased 1.7 percent in Africa & the Middle East, 4.5 percent in North America, 2.2 percent in the United Kingdom, 3 percent in the Euro Markets & Other Europe and 5.1 percent in Asia Pacific, while organic revenue decreased 7.8 percent in Latin America when compared to the same quarter of 2015.
“The effect of large currency swings in 2015 continue to negatively impact us in the first quarter,” said John Wren, CEO, Omnicom in the earnings call. However, Mr Wren expects the exchange rates to moderate to more neutral levels in the second half of 2016.
The change in organic revenue in the first quarter of 2016 as compared to the first quarter of 2015 in the four fundamental disciplines was as follows: While advertising revenue and specialty communications increased 7.9 percent and 2.2 percent respectively, CRM and public relations decreased 0.7 percent and 0.9 percent respectively.
For the first quarter of 2016, Omnicom’s earnings before interest, taxes and amortization of intangibles (EBITA) margin saw an increase to 12.0 percent for the first quarter of 2016 versus 11.7 percent in the first quarter of 2015. Operating income in the first quarter of 2016 also increased to USD 392.1 million from USD 377.7 million in the first quarter of 2015. The operating margin in the first quarter of 2016 increased to 11.2 percent versus 10.9 percent in the first quarter of 2015.
Some of the recent changes the company went through in recent times, is the introduction of a new central approach for PR and healthcare. For the stressed PR business, which encompasses around 6,000 people across 10 agencies, Omnicom moved Karen Van Bergen, CEO of Porter Novelli into a new role overseeing all PR operations. Healthcare also got a new lead for customizing teams from various healthcare groups to service clients.
“We’re seeing an increasing number of briefs coming from multinational clients looking for different types of services to be included in our responses,” said Mr. Wren on the new central approach followed by the company. He also believes that having a single team leader familiar with all of the people and capabilities across agencies will increases the opportunity of winning new business.
