Omnicom Group Inc. provides corporate communications services to clients worldwide on a global, pan-regional, national and local basis. The corporate communications services offered by the company include advertising in various media such as television, radio, newspaper, magazines, outdoor and the internet, as well as public relations, specialty advertising, direct response and promotional marketing, strategic media planning and buying, and internet and digital media development.
Industry:ADVERTISING/MKTG SVCS Sector: Business Services Fiscal Year End:December Last Reported Quarter:03/31/12 Next EPS Date:07/17/12
Capital Structure Solvency and Cash Flow
For the nine months ended September 30, 2010, operating cash flow was $43.5 million as compared with $453.1 million in 3Q09 due to unfavorable working capital performance.
Omnicom reported a decrease in net debt compared with 3Q09. At the end of the quarter, net debt was $1.5 billion, down from $1.8 billion at the end of 3Q09 based on debt repayment. As a result, interest coverage ratio remained strong at 12.9 compared with 13.7 in the year-ago period.
Omnicom increased its quarterly dividend by 33% from $0.15 to $0.20 per share during the quarter. Thus, annual dividend increased from $0.60 per share to $0.80, for a yield of about 2.3%. Omnicom expects an increase in the dividend per share to $0.92 for FY11.
Last edited Tue Dec 07, 2010 06:21 AM by BipashaChowdhury (Zacks Investment Research)
Governance Social Responsibility and Employee Relations
On October 19, 2010, Ketchum, a leading global public relations unit of Omnicom has acquired a majority stake in Maslov PR, the Moscow-based, full-service Russian public relations company. The new name for Ketchum will be Ketchum Maslov. Ketchum also integrated with the German subsidiary of Pleon, Europe’s largest strategic communications consultancy, located in Munich. With the German integration, the merger is finally completed, which began in June 2009 with the intention to create one of the largest and most diversified communications consultancies in the world.
On October 18, 2010, Omnicom Diversified Agency Services (DAS), a unit of Omnicom, acquired Amsterdam-based medical communications agency, Excerpta Medica, to enhance its client base.
On the above date only, Omnicom acquired Sales Power, an in-store promotion company. Sales Power was a joint venture between Omnicom's Diversified Agency Services (DAS) division and a local field marketing agency to supply in-store promotional requirements to the Chinese division of Unilever.
Last edited Tue Dec 07, 2010 06:22 AM by BipashaChowdhury (Zacks Investment Research)
Recent and Upcoming Events
Major Risks
Huge dependence on clients is risky as a loss of any client or reduction in client spending would adversely affect the Company’s results.
Given its international presence, Omnicom often faces unfavorable foreign currency movements.
Given the intense competitive advertising environment, pricing pressures continue to negatively impact operating margins of the Company.
Last edited Tue Dec 07, 2010 06:23 AM by BipashaChowdhury (Zacks Investment Research)
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