8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July 24, 2007

OMNICOM GROUP INC.
(Exact Name of Registrant as Specified in Charter)

New York 1-10551  13-1514814 

(State or other jurisdiction of incorporation) (Commission File Number)   (IRS Employer Identification No.)  

437 Madison Avenue, New York, NY 10022	10022
(Address of principal executive offices)	(Zip Code)

Registrants’ telephone number, including area code: (212) 415-3600

Not Applicable
(Former name or former address, if changed since last report)

        Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

|_|  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

|_|  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

|_|  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

|_|  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

        On July 24, 2007, Omnicom Group Inc. (“Omnicom”) issued an earnings release reporting its financial results for the three and six months ended June 30, 2007. A copy of this earnings release is attached as Exhibit 99.1 hereto. Following the issuance of this earnings release, Omnicom hosted an earnings call in which its financial results for the three and six months ended June 30, 2007 were discussed. The investor presentation materials used for the call are attached as Exhibit 99.2 hereto.

        On July 24, 2007, Omnicom posted the materials attached as Exhibits 99.1 and 99.2 on its web site (www.omnicomgroup.com).

        As discussed on page 1 of Exhibit 99.2, the investor presentation contains forward-looking statements within the meaning of the federal securities laws. These statements are present expectations, and are subject to the limitations listed therein and in Omnicom’s other SEC reports, including that actual events or results may differ materially from those in the forward-looking statements.

        The foregoing information (including the exhibits hereto) is being furnished under “Item 2.02 Results of Operations and Financial Condition” and “Item 7.01 Regulation FD Disclosure.” Such information (including the exhibits hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

        The filing of this Report and the furnishing of this information pursuant to Items 2.02 and 7.01 (including the investor presentation) do not mean that such information is material or that disclosure of such information is required.

Item 7.01 Regulation FD Disclosure.

        See “Item 2.02 Results of Operations and Financial Condition” above.

Item 9.01. Financial Statements and Exhibits.

        (d) Exhibits.

Exhibit Number	Description
99.1	Earnings release dated July 24, 2007.
99.2	Investor presentation materials dated July 24, 2007.

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

OMNICOM GROUP INC.
By:	/s/ Philip J. Angelastro Name: Philip J. Angelastro Title: Senior Vice President Finance and Controller

Date: July 24, 2007

 

2

EXHIBIT INDEX

Exhibit Number	Description
99.1	Earnings release dated July 24, 2007.
99.2	Investor presentation materials dated July 24, 2007.

 

3

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact: Randall Weisenburger
212-415-3393

Omnicom Reports Second Quarter 2007 Results

NEW YORK, JULY 24, 2007 - Omnicom Group Inc. (NYSE-OMC) today announced that net income for the second quarter of 2007 increased 13.4% to $276.7 million from $244.1 million in the second quarter of 2006. Diluted earnings per share in the second quarter of 2007 increased 18.3% to $0.84 per share from $0.71 per share in the second quarter of 2006.

Worldwide revenue increased 10.7% to $3,126.1 million from $2,823.4 million in the second quarter of 2006. Domestic revenue for the second quarter of 2007 increased 8.1% to $1,659.7 million compared to $1,535.4 million in the second quarter of 2006. International revenue increased 13.9% to $1,466.4 million compared to $1,288.0 million in the second quarter of 2006.

Net income for the six months ended June 30, 2007 increased 12.2% to $459.7 million from $409.7 million in the same period in 2006. Diluted earnings per share for the six months ended June 30, 2007 increased 17.9% to $1.38 per share in 2007 from $1.17 per share in the same period in 2006.

Worldwide revenue for the six months ended June 30, 2007 increased 10.8% to $5,966.7 million from $5,386.3 million in the same period in 2006. Domestic revenue for the six months ended June 30, 2007 increased 7.9% to $3,203.5 million from $2,968.4 million in the same period in 2006. International revenue for the six months ended June 30, 2007 increased 14.3% to $2,763.2 million from $2,417.9 million in the same period in 2006.

 

Omnicom Group Inc.

Omnicom Group Inc. (NYSE-OMC) (www.omnicomgroup.com) is a leading global marketing and corporate communications company. Omnicom’s branded networks and numerous specialty firms provide advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations and other specialty communications services to over 5,000 clients in more than 100 countries.

For a live webcast and/or a replay of our second quarter earnings conference call, go to www.omnicomgroup.com/InvestorRelations.

 

Omnicom Group Inc.

(Unaudited)
(In Millions of Dollars, Except Per Share Data)

Three Months Ended June 30,	2007			2006
Revenue	$	3,126.1		$	2,823.4
Operating expenses		2,664.5			2,406.0
Operating profit		461.6			417.4
Net interest expense		22.2			25.5
Income before income taxes		439.4			391.9
Income taxes		148.8			131.7
Income after income taxes		290.6			260.2
Equity in earnings of affiliates		12.5			6.3
Minority interests		(26.4	)		(22.4	)
Net income	$	276.7		$	244.1
Net income per common share(1)
Basic	$	0.85		$	0.72
Diluted	$	0.84		$	0.71
Weighted average shares(1) (in millions)
Basic		325.8			340.5
Diluted		330.8			344.1
Dividend declared per share(1)	$	0.150		$	0.125

(1) In connection with our two-for-one stock split distributed on June 25, 2007, which was effected in the form of a 100% stock dividend, all current and prior period per share amounts and weighted average share amounts have been adjusted in accordance with SFAS No. 128, “Earnings per Share.”

 

Omnicom Group Inc.

(Unaudited)
(In Millions of Dollars, Except Per Share Data)

Six Months Ended June 30,		2007			2006
Revenue	$	5,966.7		$	5,386.3
Operating expenses		5,189.6			4,684.4
Operating profit		777.1			701.9
Net interest expense		40.5			40.7
Income before income taxes		736.6			661.2
Income taxes		249.3			222.6
Income after income taxes		487.3			438.6
Equity in earnings of affiliates		17.7			11.2
Minority interests		(45.3	)		(40.1	)
Net income	$	459.7		$	409.7
Net income per common share(1)
Basic	$	1.40		$	1.18
Diluted	$	1.38		$	1.17
Weighted average shares(1) (in millions)
Basic		328.4			347.3
Diluted		333.5			350.4
Dividend declared per share(1)	$	0.275		$	0.250

(1) In connection with our two-for-one stock split distributed on June 25, 2007, which was effected in the form of a 100% stock dividend, all current and prior period per share amounts and weighted average share amounts have been adjusted in accordance with SFAS No. 128, “Earnings per Share.”

 

EX-99.2

OmnicomGroup

SECOND QUARTER 2007 RESULTS

Investor Presentation

July 24, 2007

Exhibit 99.2

1

The following materials have been prepared for use in the July 24, 2007 conference call on Omnicom’s results of

operations for the quarter ended June 30, 2007. The call will be archived on the Internet at

http://www.omnicomgroup.com/financialwebcasts.

Forward-Looking Statements

Certain of the statements in this document constitute forward-looking statements within the meaning of the Private

Securities Litigation Act of 1995. These statements relate to future events or future financial performance and involve

known and unknown risks and other factors that may cause our actual or our industry’s results, levels of activity or

achievement to be materially different from those expressed or implied by any forward-looking statements. These risks

and uncertainties include, but are not limited to, our future financial condition and results of operations, changes in

general economic conditions, competitive factors, changes in client communication requirements, the hiring and retention

of human resources and our international operations, which are subject to the risks of currency fluctuations and

exchange controls. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,”

“could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential” or “continue” or

the negative of those terms or other comparable terminology. These statements are present expectations. Actual events

or results may differ materially. We undertake no obligation to update or revise any forward-looking statement.

Other Information

All dollar amounts are in millions except for EPS. The following financial information contained in this document has not

been audited, although some of it has been derived from Omnicom’s historical financial statements, including its audited

financial statements. In addition, industry, operational and other non-financial data contained in this document have been

derived from sources we believe to be reliable, but we have not independently verified such information, and we do not,

nor does any other person, assume responsibility for the accuracy or completeness of that information.  

The inclusion of information in this presentation does not mean that such information is material or that disclosure of

such information is required.

2007 vs. 2006 P&L Summary

2

2007

2006

%

2007

2006

%

Revenue

3,126.1

$

2,823.4

$

10.7%

5,966.7

$  

5,386.3

$  

10.8%

Operating Income

461.6

417.4

10.6%

777.1

701.9

10.7%

% Margin

14.8%

14.8%

13.0%

13.0%

Net Interest Expense

22.2

25.5

40.5

40.7

Profit Before Tax

439.4

391.9

12.1%

736.6

661.2

11.4%

% Margin

14.1%

13.9%

12.3%

12.3%

Taxes

148.8

131.7

249.3

222.6

% Tax Rate

33.9%

33.6%

33.8%

33.7%

Profit After Tax

290.6

260.2

11.7%

487.3

438.6

11.1%

Equity in Affiliates

12.5

6.3

17.7

11.2

Minority Interest

(26.4)

(22.4)

(45.3)

(40.1)

Net Income

276.7

$   

244.1

$   

13.4%

459.7

$     

409.7

$     

12.2%

Second Quarter

Year to Date

2007 vs. 2006 Earnings Per Share ^(a)

Earnings per Share:

Basic

Diluted

  Growth Rate, Diluted

Weighted Average Shares (millions):

Basic

Diluted

Dividend Declared Per Share

$  0.85%

0.84%

   18.3%

325.8%

330.8%

$0.15%

2006

2007

Second Quarter

$  0.72

0.71

340.5344.1

$0.125

$  1.40%

1.38%

17.9%

328.4%

333.5%

$0.275%

2006

2007

Year to Date

$  1.18

1.17

347.3
350.4

$0.25

(a)

In connection with our two-for-one stock split distributed on June 25, 2007, which was effected in the form of a 100% stock
dividend, all current and prior period per share amounts and weighted average share amounts have been adjusted in accordance
with SFAS No. 128, “Earnings per Share.”

3

2007 Total Revenue Growth

(a)

To calculate the FX impact, we first convert the current period’s local currency revenue using the average exchange rates from the
equivalent prior period to arrive at constant currency revenue.  The FX impact equals the difference between the current period
revenue in U.S. dollars and the current period revenue in constant currency.

(b)

Acquisition revenue is the aggregate of the applicable prior period revenue of the acquired businesses.  Netted against this number
is the revenue of any business included in the prior period reported revenue that was disposed of subsequent to the prior period.

(c)

Organic revenue is calculated by subtracting both the acquisition revenue and the FX impact from total revenue growth.

4

$

%

$

%

Prior Period Revenue

2,823.4

$  

5,386.3

$   

Foreign Exchange (FX) Impact (a)

88.7

3.1%

176.0

3.3%

Acquisition Revenue (b)

6.2

0.2%

8.3

0.1%

Organic Revenue (c)

207.8

7.4%

396.1

7.4%

Current Period Revenue

3,126.1

$  

10.7%

5,966.7

$   

10.8%

Second Quarter

Year to Date

5

Second Quarter

Year to Date

Advertising

43.5%

PR

10.3%

CRM

35.8%

  Specialty

10.4%

Advertising

43.7%

PR

10.3%

CRM

35.9%

Specialty

10.1%

(a)  “Growth” is the year-over-year increase or decrease from the prior period.  

2007RevenueByDiscipline

Pie Chart

$ Mix

% Growth

(a)

$ Mix

% Growth

(a)

Advertising

1,366.5

11.8%

####

Advertising

2,592.3

11.3%

CRM

1,121.0

14.8%

####

CRM

2,137.7

14.5%

PR

321.7

11.9%

####

PR

615.8

12.7%

Specialty

316.9

-5.9%

####

Specialty

620.9

-3.5%

Second Quarter

United
States

53.7%

UK

11.3%

Euro

Markets

20.8%

Other

14.2%

Year to Date

United
States

53.1%

UK

11.1%

Euro

Markets

21.4%

Other

14.4%

6

^(a)  “Growth” is the year-over-year increase or decrease from the prior period.  

2007 Revenue By Geography

$ Mix

$ Growth(a)

$ Mix

$ Growth(a)

United States

1,659.7

$   

124.3

$      

United States

3,203.5

$   

235.1

$      

Organic

121.7

Organic

232.1

Acquisition

2.6

Acquisition

3.0

International

1,466.4

$   

178.4

$      

International

2,763.2

$   

345.3

$      

Organic

86.1

Organic

164.0

Acquisition

3.6

Acquisition

5.3

FX

88.7

FX

176.0

$ Mix

% Growth(a)

$ Mix

% Growth(a)

United States

1,659.7

$     

8.1%

United States

3,203.5

$      

7.9%

Euro Currency Markets

667.8

16.9%

Euro Currency Markets

1,243.0

17.7%

United Kingdom

347.4

14.3%

United Kingdom

673.4

16.6%

Other

451.2

9.3%

Other

846.8

7.9%

Cash Flow – GAAP Presentation (condensed)

7

2007

2006

Net Income

459.7

$     

409.7

$     

  Stock-Based Compensation Expense

36.2

33.9

  Depreciation and Amortization

98.3

90.3

  Other Non-Cash Items to Reconcile to Net Cash Provided by Operations

43.4

37.4

  Other Changes in Working Capital

(670.6)

(374.6)

  Excess Tax Benefit on Stock Compensation

(14.5)

(10.1)

Net Cash (Used) Provided by Operations

(47.5)

186.6

  Capital Expenditures

(101.2)

(73.0)

  Acquisitions

(143.9)

(138.5)

  Other Investing Activities, net

141.3

332.4

  Repayment of LT Notes Receivable

-

13.5

Net Cash (Used) Provided by Investing Activities

(103.8)

134.4

  Dividends

(84.2)

(89.8)

  Proceeds from Issuance of Debt

0.7

995.8

  Repayment of Debt

(0.2)

(134.1)

  Stock Repurchases

(756.8)

(978.6)

  Share Transactions Under Employee Stock Plans

66.3

173.5

  Excess Tax Benefit on Stock Compensation

14.5

10.1

  Other Financing Activities

(43.5)

(42.7)

Net Cash Used by Financing Activities

(803.2)

(65.8)

Effect of exchange rate changes on cash and cash equivalents

(12.6)

1.0

Net (Decrease) Increase in Cash and Cash Equivalents

(967.1)

$   

256.2

$     

6 Months Ended June 30,

Current Credit Picture

8

(a) “Operating Income (EBIT)” and “Net Interest Expense”  calculations shown are the latest twelve month (“LTM”)  figures for the periods specified.

       Although our bank agreements reference EBITDA, we have used EBIT for this presentation because EBITDA is a non-GAAP measure.

(b)   In June 2006, holders of our Convertible Notes Due 6/15/33 were offered a supplemental interest payment not to put the notes to us for repurchase

       and to consent to certain amendments to the notes, including extending the maturity date on such notes.  Holders of $467.3 million of notes

       consented to the amendments, thus creating the Convertible Notes Due 7/1/38.  The remaining holders of the notes put the notes to us for repurchase.

2007

2006

Operating Income (EBIT)(a)

$

1,559

$

1,402

Net Interest Expense(a)

$

91.4

$

73.5

EBIT / Net Interest

17.1

x

19.1

x

Net Debt / EBIT

1.4

x

1.5

x

Debt:

Bank Loans (Due Less Than 1 Year)

$

11

$

17

CP Issued Under $2.5B - 5 Year Revolver Due 6/23/11

-

-

Convertible Notes Due 2/7/31

847

847

Convertible Notes Due 7/31/32

727

892

Convertible Notes Due 6/15/33

(b)

-

40

Convertible Notes Due 7/1/38

(b)

467

427

10 Year Notes Due 4/15/16

996

995

Other Debt

19

19

Total Debt

$

3,067

$

3,237

Cash and Short Term Investments

821

1,135

Net Debt

$

2,246

$

2,102

LTM ended June 30,

Current Liquidity Picture

9

(a)

Credit facility expires June 23, 2011.

(b)

Represents uncommitted facilities in the U.S., U.K. and Canada. These amounts are excluded from our available
liquidity for purposes of this presentation.

Total Amount

Of Facility

Outstanding

Available

Committed Facilities

5 Year Revolver

(a)

2,500

$         

-

$         

2,500

$   

Other Committed Credit Facilities

11

11

-

Total Committed Facilities

2,511

11

2,500

Uncommitted Facilities

(b)

372

-

-

(b)

Total Credit Facilities

2,883

$         

11

$            

2,500

$   

Cash and Short Term Investments

821

Total Liquidity Available

3,321

$   

As of June 30, 2007

Acquisitions Summary

10

Acquisition Related Expenditures

11

Note: See appendix for subsidiary acquisition profiles.

Includes acquisitions of a majority interest in agencies resulting in their consolidation.

Includes acquisitions of additional equity interests in existing affiliate agencies resulting in their majority ownership and consolidation.

Includes acquisitions of less than a majority interest in agencies in which Omnicom did not have a prior equity interest and the acquisition
of additional interests in existing affiliated agencies that did not result in majority ownership.

Includes the acquisition of additional equity interests in already consolidated subsidiary agencies.

Includes additional consideration paid for acquisitions completed in prior periods.  

(a)

(b)

(c)

(d)

(e)

New Subsidiary Acquisitions (a)

17

$   

Affiliates to Subsidiaries (b)

-

Affiliates (c)

-

Existing Subsidiaries (d)

32

Earn-outs (e)

97

Total Acquisition Expenditures

146

$

6 Months YTD 2007

Potential Earn-out Obligations

The following is a calculation of future earn-out obligations as of
June 30, 2007, assuming that the underlying acquired agencies
continue to perform at their current levels: ^(a)

(a)

The ultimate payments will vary as they are dependent on future events and changes in FX rates.

12

2007

2008

2009

2010

Thereafter

Total

62

$   

125

$  

73

$   

97

$   

34

$         

391

$  

Potential Obligations

13

(a)  The ultimate payments will vary as they are dependent on future events and changes in FX rates.

In conjunction with certain transactions, Omnicom has agreed to
acquire (at the sellers’ option) additional equity interests. If these rights
are exercised, there would likely be an increase in our net income as a
result of our increased ownership and the reduction of minority interest
expense.  The following is a calculation of  these potential future
obligations (as of June 30, 2007), assuming these underlying acquired
agencies continue to perform at their current levels: ^(a)

Currently

Exercisable

Not Currently

Exercisable

Total

Subsidiary Agencies

143

$           

76

$            

219

$         

Affiliated Agencies

65

7

72

Total

208

$           

83

$            

291

$         

Second Quarter Acquisitions

14

ECI

ECI is an award winning direct response agency specializing in

one-to-one marketing for highly regulated industries, such as

financial services, healthcare, telecommunications and utilities.  

In addition to its full-service agency capabilities, ECI offers

comprehensive in-house database resources, with on-site data

warehousing, modeling and analysis.

ECI will operate as a member of the Star Marketing Group and is

located in San Francisco, California.

Second Quarter Acquisitions

15

ASA Events

ASA Events is a youth lifestyle marketing and entertainment

company that connects brands to consumers through

professional and amateur sports events.  ASA Events’ services

include event design and production, mobile marketing, action

sports consulting and management of proprietary content related

to action sports events.

The company is a member of the Radiate Group of companies

and is located in Culver City, California.