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 22, 2008

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

New York
(State or other jurisdiction
of incorporation) 1-10551
(Commission
File Number) 13-1514814
(IRS Employer
Identification No.)

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

Registrant’s 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 22, 2008, Omnicom Group Inc. (“Omnicom”) issued an earnings release reporting its financial results for the three and six months ended June 30, 2008. 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, 2008 were discussed. The investor presentation materials used for the call are attached as Exhibit 99.2 hereto.

        On July 22, 2008, 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 22, 2008.
99.2	Investor presentation materials dated July 22, 2008.

 

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 22, 2008

 

2

EXHIBIT INDEX

Exhibit Number	Description
99.1	Earnings release dated July 22, 2008.
99.2	Investor presentation materials dated July 22, 2008.

 

3

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contact: Randall Weisenburger
212-415-3393     

Omnicom Reports Second Quarter 2008 Results

NEW YORK, JULY 22, 2008 - Omnicom Group Inc. (NYSE-OMC) today announced that net income for the second quarter of 2008 increased 11.0% to $307.0 million from $276.7 million in the second quarter of 2007. Diluted earnings per share in the second quarter of 2008 increased 14.3% to $0.96 per share from $0.84 per share in the second quarter of 2007.

Worldwide revenue increased 11.2% to $3,476.9 million from $3,126.1 million in the second quarter of 2007. Domestic revenue for the second quarter of 2008 increased 5.5% to $1,751.3 million compared to $1,659.7 million in the second quarter of 2007. International revenue increased 17.7% to $1,725.6 million compared to $1,466.4 million in the second quarter of 2007.

Net income for the six months ended June 30, 2008 increased 12.2% to $515.6 million from $459.7 million in the same period in 2007. Diluted earnings per share for the six months ended June 30, 2008 increased 16.7% to $1.61 per share in 2008 from $1.38 per share in the same period in 2007.

Worldwide revenue for the six months ended June 30, 2008 increased 11.8% to $6,672.3 million from $5,966.7 million in the same period in 2007. Domestic revenue for the six months ended June 30, 2008 increased 6.5% to $3,412.5 million from $3,203.5 million in the same period in 2007. International revenue for the six months ended June 30, 2008 increased 18.0% to $3,259.8 million from $2,763.2 million in the same period in 2007.

 

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,	2008		2007
Revenue	$    3,476.9		$    3,126.1
Operating expenses	2,960.1		2,664.5
Operating profit	516.8		461.6
Net interest expense	18.7		22.2
Income before income taxes	498.1		439.4
Income taxes	167.2		148.8
Income after income taxes	330.9		290.6
Equity in earnings of affiliates	11.0		12.5
Minority interests	(34.9	)	(26.4	)
Net income	$        307.0		$        276.7
Net income per common share
Basic	$          0.97		$          0.85
Diluted	$          0.96		$          0.84
Weighted average shares (in millions)
Basic	317.5		325.8
Diluted	320.8		330.8
Dividend declared per share	$        0.150		$        0.150

 

Omnicom Group Inc.

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

Six Months Ended June 30,	2008		2007
Revenue	$    6,672.3		$    5,966.7
Operating expenses	5,804.7		5,189.6
Operating profit	867.6		777.1
Net interest expense	29.7		40.5
Income before income taxes	837.9		736.6
Income taxes	282.4		249.3
Income after income taxes	555.5		487.3
Equity in earnings of affiliates	19.1		17.7
Minority interests	(59.0	)	(45.3	)
Net income	$        515.6		$        459.7
Net income per common share
Basic	$          1.62		$          1.40
Diluted	$          1.61		$          1.38
Weighted average shares (in millions)
Basic	317.9		328.4
Diluted	321.1		333.5
Dividend declared per share	$        0.300		$        0.275

 

EX-99.2

OmnicomGroup

SECOND QUARTER 2008 RESULTS

Investor Presentation

July 22, 2008

Exhibit 99.2

1

The following materials have been prepared for use in the July 22, 2008 conference call on Omnicom’s results of operations for the period
ended June 30, 2008. The call will be archived on the Internet at http://www.omnicomgroup.com/financialwebcasts.

Forward-Looking StatementsCertain 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, except as required by law.

Other Information
All dollar amounts are in millions except for EPS. The 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.

2

2008 vs. 2007 P&L Summary

2008

2007

%

2008

2007

%

Revenue

3,476.9

$

3,126.1

$

11.2%

6,672.3

$  

5,966.7

$  

11.8%

Operating Profit

516.8

461.6

12.0%

867.6

777.1

11.6%

% Margin

14.9%

14.8%

13.0%

13.0%

Net Interest Expense

18.7

22.2

29.7

40.5

Profit Before Tax

498.1

439.4

13.4%

837.9

736.6

13.8%

% Margin

14.3%

14.1%

12.6%

12.3%

Taxes

167.2

148.8

282.4

249.3

% Tax Rate

33.6%

33.9%

33.7%

33.8%

Profit After Tax

330.9

290.6

13.9%

555.5

487.3

14.0%

Equity in Affiliates

11.0

12.5

19.1

17.7

Minority Interest

(34.9)

(26.4)

(59.0)

(45.3)

Net Income

307.0

$   

276.7

$   

11.0%

515.6

$     

459.7

$     

12.2%

Second Quarter

Year to Date

3

2008 vs. 2007 Earnings Per Share

Earnings per Share:

Basic

Diluted

  Growth Rate, Diluted

Weighted Average Shares (millions):

Basic

Diluted

Dividend Declared Per Share

$  0.97

0.96

14.3

317.5

320.8

$0.150

2007

2008

Second Quarter

$  0.85

0.84

325.8330.8

$0.150

$  1.62
1.61

16.7

317.9

321.1

$0.300

2007

2008

Year to Date

$  1.40

1.38

328.4

333.5

$0.275

%

%

4

2008 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.

$

%

$

%

Prior Period Revenue

3,126.1

$  

5,966.7

$   

Foreign Exchange (FX) Impact (a)

162.9

5.2%

308.5

5.2%

Acquisition Revenue (b)

38.0

1.2%

65.9

1.1%

Organic Revenue (c)

149.9

4.8%

331.2

5.6%

Current Period Revenue

3,476.9

$  

11.2%

6,672.3

$   

11.8%

Second Quarter

Year to Date

5

Second Quarter

Year to Date

Advertising

43.3%

PR

9.7%

CRM

37.2%

  Specialty

9.8%

Advertising

43.1%

PR

9.6%

CRM

37.8%

Specialty

9.5%

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

2008 Revenue By Discipline

Pie Chart

$ Mix

% Growth

(a)

$ Mix

% Growth

(a)

Advertising

1,499.9

9.8%

####

Advertising

2,891.2

11.5%

CRM

1,313.8

17.2%

####

CRM

2,481.3

16.1%

PR

333.4

3.7%

9.6%

PR

648.4

5.3%

Specialty

329.8

4.1%

9.5%

Specialty

651.4

4.9%

6

Second Quarter

2008 Revenue By Geography

United
States

51.1%

UK

10.3%

Euro

Markets

22.5%

Other

16.1%

Year to Date

United
States

50.4%

UK

9.9%

Euro

Markets

23.0%

Other

16.7%

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

$ Mix

$ Growth

(a)

$ Mix

$ Growth

(a)

United States

1,751.3

$     

91.6

$        

United States

3,412.5

$      

209.0

$      

Organic

71.7

Organic

175.1

Acquisition

19.9

Acquisition

33.9

International

1,725.6

$     

259.2

$      

International

3,259.8

$      

496.6

$      

Organic

78.2

Organic

156.1

Acquisition

18.1

Acquisition

32.0

FX

162.9

FX

308.5

$ Mix

% Growth

(a)

$ Mix

% Growth

(a)

United States

1,751.3

$        

5.5%

United States

3,412.5

$         

6.5%

Euro Currency Markets

798.6

19.6%

Euro Currency Markets

1,499.6

20.6%

United Kingdom

345.9

-0.4%

United Kingdom

688.9

2.3%

Other

581.1

28.8%

Other

1,071.3

26.5%

7

Cash Flow – GAAP Presentation (condensed)

2008

2007

Net Income

515.6

$     

459.7

$     

  Stock-Based Compensation Expense

27.8

36.2

  Depreciation and Amortization

115.7

98.3

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

58.6

43.4

  Other Changes in Working Capital

(799.6)

(670.6)

  Excess Tax Benefit on Stock Compensation

(9.6)

(14.5)

Net Cash Used by Operations

(91.5)

(47.5)

  Capital Expenditures

(92.7)

(101.2)

  Acquisitions

(210.1)

(143.9)

  Other Investing Activities, net

(0.2)

141.3

Net Cash Used by Investing Activities

(303.0)

(103.8)

  Dividends

(97.3)

(84.2)

  Stock Repurchases

(407.8)

(756.8)

  Share Transactions Under Employee Stock Plans

63.7

66.3

  Excess Tax Benefit on Stock Compensation

9.6

14.5

  Other Financing Activities

(48.0)

(43.0)

Net Cash Used by Financing Activities

(479.8)

(803.2)

Effect of exchange rate changes on cash and cash equivalents

(3.1)

(12.6)

Net Decrease in Cash and Cash Equivalents

(877.4)

$   

(967.1)

$   

6 Months Ended June 30,

8

Current Credit Picture

(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.

2008

2007

Operating Income (EBIT)   

(a)

$

1,750

$

1,559

Net Interest Expense   

(a)

$

63.3

$

91.4

EBIT / Net Interest

27.6

x

17.1

x

Net Debt / EBIT

1.2

x

1.4

x

Debt:

Bank Loans (Due Less Than 1 Year)

$

23

$

11

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

727

Convertible Notes Due 6/15/33

-

-

Convertible Notes Due 7/1/38

468

467

10 Year Notes Due 4/15/16

996

996

Other Debt

20

19

Total Debt

$

3,081

$

3,067

Cash and Short Term Investments

959

821

Net Debt

$

2,122

$

2,246

LTM Ended June 30,

9

Current Liquidity Picture

(a)

Credit facility expires June 23, 2011.

(b)

Represents uncommitted facilities in the U.S., U.K. and Canada as of June 30, 2008. 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

23

23

-

Total Committed Facilities

2,523

23

2,500

Uncommitted Facilities  

(b)

598

-

-

(b)

Total Credit Facilities

3,121

$         

23

$            

2,500

$   

Cash and Short Term Investments

959

Total Liquidity Available

3,459

$   

As of June 30, 2008

10

Acquisitions Summary

11

Acquisition Related Expenditures

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)

53

$   

Affiliates to Subsidiaries

(b)

-

Affiliates

(c)

9

Existing Subsidiaries

(d)

57

Earn-outs

(e)

109

Total Acquisition Expenditures

228

$

6 Months YTD 2008

12

Potential Earn-out Obligations

The following is a calculation of future earn-out obligations as of
June 30, 2008, 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.

2008

2009

2010

2011

Thereafter

Total

75

$   

104

$  

82

$   

28

$   

23

$         

312

$  

13

Potential Obligations

(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, 2008), assuming these underlying acquired
agencies continue to perform at their current levels: ^(a)

Currently

Exercisable

Not Currently

Exercisable

Total

Subsidiary Agencies

186

$           

86

$            

272

$         

Affiliated Agencies

56

6

62

Total

242

$           

92

$            

334

$         

14

Second Quarter Acquisitions

Sterling Brands

Sterling Brands is a leading brand consultancy specializing in brand
strategy and design.  Specific services offered include brand
positioning, strategic research, innovation, design planning, brand
identity and packaging design.

Sterling Brands is based in New York and San Francisco.