Citing the pandemic Omnicom reported a 9.3% revenue drop in the fourth quarter of 2020 to nearly $3.8 billion. The organic revenue decline for the period (which strips out M&A and currency fluctuations) was 9.6%.
For the full year revenues slid 11.9% to nearly $13.2 billion with an organic revenue shortfall of 11.1%.
Company CEO John Wren told investors and analysts on an earnings call Thursday morning that the firm expects to return to growth in the second quarter and be in positive territory for full-year 2021. The current quarter will be negative but less so than Q4, he added.
How much growth will be achieved this year is unclear given the vagaries of the pandemic.
All regions were in the red from an organic revenue standpoint for the full-year, given the global nature of the pandemic. The U.S. was down 10% for the full year and 9.4% for Q4. Most of the other regions were down double-digits for the year although APAC fared somewhat better, down just 8.5%.
By discipline in 2020, Advertising (creative and media) was down 12%, CRM-related businesses were down 15% plus, and PR fell 4.2%. Hardest hit were events and field marketing businesses. Healthcare was the best performer, posting organic growth of 3.3%.
The company took an impairment charge of around $60 million related to losses on the sale of certain companies that are being sold.
While many clients have cut spending on services provided by the holding company, Wren said, “we’re seeing improving attitudes [among clients] but COVID is still here.”
Media spending “will clearly be better in 2021,” Wren said. But he noted that some clients are committing to shorter durations,” given the experience over the past year. “But we think everything will be more positive” this year.
The company also announced a 7.7% increase in the company’s dividend but said during a call that a stock buyback program was not currently a priority.
Company shares were up slightly in morning trading after release of the earnings report.