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Omnicom’s Net Income Dips As Revenue Shrinks In Uk, North America




Omnicom’s net income for 2017 dropped 5.2%, to $1.09bn (£780m), with UK and North American revenues dropping last year.

This was partly due to the US Tax Cuts and Jobs Act which increased the group’s taxes by $106.3m in the final quarter.

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This resulted in net income for the last quarter of 2017 taking a hit and dropping 27.4% to $254.4m, from $350.3m in the same period of 2016.

Lowered full-year net income is also attributable to a drop in the group’s revenue which dropped 0.9% to $15.27bn.

Although the group’s full-year organic revenue grew 3%, it noted a drop in its acquisition revenue, net of disposition revenue of 4.2%, resulting in a loss of $647.3m.

Regionally,  Omnicom’s UK revenues dropped by 0.9%, while its North American business shrunk 5.3%.

The group performed better in the Euro markets and other Europe which grew 9.4%, Asia-Pacific (0.9%), Latin America (16.8%), and the Middle East and Africa (12.8%).

In terms of organic revenue by region, Omnicom reported full-year growth of 0.6% in North America and 5.1% in the UK. It also grew by 0.9% in Asia-Pacific, 9.4% in Euro and Other Europe, 16.8% in Latin America and 12.8% in Middle East and Africa.

The bulk of Omnicom’s revenue comes from North America (56.9), followed by Euro Markets and Other Europe (17.9%) and Asia-Pacific (10.8%). The UK contributed 9.1% of the group’s revenues.

By discipline, Omnicom’s advertising practice shrunk 0.6% and accounted for just over half (53.3%) of its revenue. Its CRM consumer experience and CRM execution and support dropped 3.2% and 1.6% respectively and jointly accounted for nearly a third (31.6%) of the group’s revenue.

The disciplines that showed revenue growth over the past year were healthcare (3.3% which contributed 6.1% to the group’s revenue and PR (0.1%) which contributed 9%.

In the fourth quarter, the group’s revenue dropped by 1.5% to $4.18bn and across the group’s disciplines, revenue performance was: advertising (-4%), CRM consumer experience (2.8%), CRM execution & support (1.8%) and public relations (1.1%), while healthcare (-1.8%).

This comes in under analyst estimates of $4.21bn, reported Reuters.


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