Omnicom Group released first quarter results after the financial markets closed Tuesday, reporting strong organic revenue growth of 11.9%. The company’s stock was up nearly 3% on the day and surged another nearly 4% in after hours trading on the robust performance.
Total revenue fell a half of a percentage point to $3.4 billion. The company cited the negative impact currency fluctuations and a decrease in M&A revenues versus the year ago period.
The firm also took a charge against earnings of $113.4 million attributed to the impact of the war in Ukraine and the shuttering of the company’s operations in Russia.
CEO John Wren said the company is continuing to provide all the humanitarian aid needed to help its employees in Ukraine and called out not only their strength and bravery under fire but also the tireless efforts of colleagues in neighboring countries (Poland, the Czech Republic, Romania and others) who are doing all they can do to assist their Ukrainian colleagues.
“Overall we’re very pleased with the first quarter performance,” Wren said on an earnings call. And while there are a number of macro uncertainties, including the war, high inflation and the unpredictability of COVID, Wren said the strong first quarter growth has prompted the company to raise its growth outlook for the year to between 6% and 6.5%.
That’s up from the 5% to 6% the firm projected in early February. Wren said it was the first time in the 26 years he's been running the company that the company has upgraded its growth outlook at the end of Q1.
That upgrade comes despite some uncertainties about the second half of the year. Wren acknowledged that the upgrade was “conservative,” given the strong Q1 performance and acknowledged that the first quarter growth rate is not sustainable for the rest of the year.
Clients, said Wren, “recognize the uncertainties but they’re not stepping back.”
Organic growth (which factors out currency and M&A impact) increased across all of the company’s core disciplines, including 9.1% for advertising & media, 20.3% for precision marketing, 13.8% for commerce & brand consulting, 68.0% for experiential, 14% for public relations and 7.7% for healthcare.
By region, the U.S. posted 10.6% growth, with the biggest contributions coming from advertising and media, precision marketing and public relations, the company said.
The UK was up 10.3%, Europe, up 13.8%, Asia Pacific, up 11.1%, Latin America, up 9.3% and Middle East & Africa, up 63.8%.