Omnicom falls short but still posts 2.2% organic growth in Q3

Omnicom posted organic growth of 2.2% in the third quarter of 2019, in contrast to Publicis Groupe, which last week reported a 2.7% decline.

The US-owned ad holding group reported that total revenue fell 2.4% to $3.6bn in the third quarter, compared with $3.7bn in the same period last year, blaming the "negative effects of foreign exchange rates" and a "decrease in acquisition revenue".

Analysts said revenue fell short of the expected figure of about $3.65bn, according to Institutional Brokers Estimate System data from Refinitiv.

The 2.2% organic revenue growth figure is down from 2.9% for the same period in 2018.

Across its global operations, Omnicom said organic growth was up 3% in the UK, 2.7% in the US, 1.6% in euro markets, 0.4% in Asia-Pacific and 6.6% in Latin America. In the Middle East and Africa, growth fell 4.5%.

Organic growth was helped by an overall 3.4% hike in advertising worldwide, a 1.8% boost to CRM consumer experience and a 9.5% increase in healthcare. However, CRM execution was down 1.5% and PR fell 3.8%.

With net income totalling $290.2m in the third quarter, down 3% year on year from $298.9m, Omnicom said that its performance was hit by a tax increase of $18.2m and other charges. Without these, it said net income would have increased by 3.4%.

Publicis' third-quarter figures saw the French group report a revenue decline of 2.7%, with its performance affected by adspend cuts and the bedding in of acquisitions leading to management taking its "eye off the ball".