• by Steve McClellan  @mp_mcclellan, July 19, 2022

Omnicom kicked off Adland’s Q2 reporting season today with a strong report and a second upgrade for full-year organic growth that pushed the company’s stock up more than 6% in after-hours trading. That was on top of a 3% increase during the regular Tuesday trading session.

Organic revenue growth (which factors out currency and M&A impact) remained strong at 11.3% overall in Q2 with all key operating segments reporting gains. CEO John Wren told analysts the firm has upgraded its full-year organic growth forecast to between 6.5% and 7%. That’s up from the 6% to 6.5% guidance that the firm offered in April.

And the upgrade comes amid client caution given unknowns about a possible recession, inflation, the war in Ukraine, supply chain issues and other macroeconomic factors, Wren told analysts.

Wren was peppered with questions from analysts during an earnings call Tuesday afternoon about a possible recession. He noted that he’s been through three previous recessions while at the helm of Omnicom and that now, he believes, the company is “more fit for purpose than at any time in my career. I’m very pleased with where we stand.”

He noted numerous talks he had with clients at the Cannes Lions Festival Of Creativity in June and they have concerns about the bigger picture unknowns. That said, Wren added it’s too early to offer guidance about next year.  

Wren also took a stand on the U.S. Supreme Court’s ruling last month overturning Roe V. Wade, saying it was “a step back in the advancement of women’s rights,” and that the company would do everything in its power to insure equal access to health services for all its employees.

And while the Ukraine war has had an impact on company finances, Wren said the firm would continue to support employees around the world who are impacted by the conflict. Second quarter revenue was flat for the period at $3.6 billion, largely due to a decline in acquisition revenue and the closing of its Russian operations in the first quarter.

By operating segment, Q2 organic growth at the company was 8.2% for Advertising & Media, 15.8% for Public Relations, 21% for Precision Marketing, 9.2% for Healthcare, 9.3% for Execution & Support, 11.2% for Commerce & Brand Consulting, and 36.6% for Experiential.

By region organic growth was 10.7% for the U.S., 15.1% for Europe; 4.7% for Asia Pacific, 12% for the UK, 14.% for Latin America and 28.3% for the Middle East & Africa.  The company said growth in Asia Pacific was negatively impacted by COVID-19 lockdowns in China.

Net income was flat at $348 million, due in part to a one-time gain of $50.5 million in profit last year from the sale of its barter trading company Icon International.