Omnicom Posts 5.3% Rise in Q2 Organic Revenue

Net drops because of foreign exchange rates

Omnicom, hit by foreign exchange rates, said second-quarter revenue declined 1.7 percent to $3.8 billion.

The continuing strength of the U.S. dollar drove revenue down by 7.1 percent or $275 million.

Organic revenue rose 5.3 percent, with company chief John Wren telling analysts that growth exceeded company expectations.It increased 5.9 percent in North America, 5.4 percent in the U.K., 3.9 percent in Europe, 7.6 percent in Asia Pacific and 11.9 percent in Africa and the Middle East, the company announced today. Latin America posted a 9.6 percent decline in organic revenue, with results in Brazil and Chile offsetting strong results in Mexico. Wren discussed the continuing economic turmoil in Greece but said that country accounts for less than one tenth of one percent of Omnicom's overall revenue.

Net income for the second quarter dropped 3.5 percent to $ 313.9 million, largely because of a higher tax rate in the latest quarter compared to the year earlier period. (In the 2014 quarter the holding company received an income tax benefit of $11 million related to expenses incurred in relation to Omnicom's proposed merger with Publicis Groupe, which was terminated in May 2014.)    

In the first six months, Omnicom's advertising operations showed the largest gain in organic revenue, rising 7.0 percent while CRM increased 3.5 percent, public relations climbed 1.6 percent and specialty communications rose 5.4 percent.

On a call to financial analysts, Wren discussed the current number of industry media agency reviews, called this an "unprecedented period" with more media pitches than he had ever seen. Saying he sees only "upside opportunity" for Omnicom, he acknowledged the company itself has $1.2 billion of its own business in play, but pointed out that much of that is handled alongside other agencies. Should Omnicom's OMG media agencies prevail in those reviews, and win conslidated business, Wren estimated the company stands to gain $1 billion in new business.