Omnicom Q3 organic revenue grows 3.3%

Omnicom reported better-than-expected revenue growth, outperforming Wall Street expectations for the quarter that ended on September 30, 2023.

Compared to a consensus forecast of US$3.55 billion from six analysts surveyed by LSEG, Omnicom reported global revenue of US$3.58 billion in the third quarter, up 3.3% organically from the same period last year. Its net income rose 2% to $371.9 million.

In contrast to analysts' projections of $1.84, the business earned $1.86 per share. 

The parent company, which owns BBDO Worldwide, DDB Worldwide, TBWA Worldwide, and DAS Group, reported organic growth of $113.1 million, or 3.3%, in the quarter.

Notable growth was witnessed in the Advertising and Media, Precision Marketing, and Healthcare disciplines. To give more details, the advertising and media discipline posted a revenue increase of 6.1% to $1.9 billion; precision marketing was up 4.3% to $383.7 million; and experiential jumped 9.2% to $133.3 million; whilst healthcare saw a 3.8% spike to $341.8 million. 

The results come at the back of important recent wins including the $600 million Uber media account, which switched to Omincom Media Group from rival WPP back in September. Omnicom Media Group also retained the lucrative HSBC global media account earlier this year following a highly competitive pitch process which lasted for more than six months.

Meanwhile, Omnicom Group’s PR which includes companies like FleishmanHillard, Ketchum, Marina Maher Communications, and Porter Novelli, posted a 5.5% organic revenue decline to $392.4 million in Q3. PR wasn’t the only segment that suffered losses. Commerce and branding dropped 1.7% to $211.6 million, while execution and support fell 3.6% to $206.1 million. 

The US accounts for almost half of Omnicom's revenue, with Europe being its second-largest market. 

By region, U.S. organic revenue rose 2.7% to $1.9 billion; other North American markets fell 1.7% to $114.4 million; and the U.K. was up 4.4% to $407.1 million. 

European markets jumped by 5.7% to $609.7 million; Asia-Pacific was up by 2.5% to $427.1 million; Latin America improved by 19.2% to $99.4 million; and the Middle East and Africa decreased by 10.8% to $51.6 million.

"We are pleased with our strong organic revenue growth of 3.3%, with notable performances in our advertising and media, precision marketing, and healthcare disciplines. Our year-to-date organic growth of 4.0% remains in line with our full-year expectations, which reflects the resiliency of our business even in periods of economic uncertainty," said John Wren, chairman and CEO of Omnicom. 

"Omnicom continued to post strong profitability and earnings growth in the quarter, and our recent business wins validate the benefits of our client strategy in this rapidly evolving marketplace," added Wren. "We are very well positioned for a recovery in business conditions, with a strong balance sheet and leading creativity in all of our service disciplines."