Credit: Melanie Sykes via Unsplash
Omnicom, recording a loss for the December quarter, has doubled its target for synergies from the takeover of competitor IPG to $US1.5 billion
The world’s biggest global advertising group has also identified “non-strategic and underperforming” businesses for sale or exit, raising about $US2.5 billion.
In its first results announcement since the takeover, Omnicom recorded revenue of $US5.5 billion in the December quarter and a net loss of $0.9 billion.
This was a jump of 27.9% in revenue compared to the fourth quarter of 2024, mainly due adding one month of revenue attributable to IPG.
Operating expenses increased $US2.9 billion to $US6.5 billion, including $186.7 million of transaction costs related to the acquisition of IPG, $US1.1 billion of repositioning costs and $US543.4 million of loss on planned asset sales. The expenses include one month of operating expenses of IPG.
Salary and service costs increased 28.6% to $US4 billion primarily due to the IPG acquisition.
Over the full year, revenue was $US17.3 billion and the net loss $US54.5 million.
Omnicom, reporting its results, also announced a $US5 billion share repurchase program.
The takeover of IPG, which was finalised in November last year, created the world’s biggest global advertising group with 100,000 people and expected full year revenue of $US25.6 billion.
In the process, thousands of jobs have been lost as the most senior executives share a reported $US80 million bonus, including $US49 million to former IPG chief executive Philippe Krakowsky.
"Since the successful closing of the Interpublic acquisition on November 26, we made key leadership and brand announcements, refreshed our enterprise growth strategy, and launched the next generation of our Omni data and technology platform," said CEO John Wren.
"We have also executed on three key priorities.
“First, we are simplifying and aligning our portfolio of businesses to prioritise Connected Capability delivery, growth and profitability.
“Second, we are doubling our total cost synergy target to $US1.5 billion, including $900 million in 2026.
“And third, our board has authorised a $5 billion share buyback, including a $2.5 billion accelerated share repurchase.
“We expect these catalysts to positively transform our business performance this year and beyond."
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