Omnicom Group says it is positioned for a “very strong recovery” in 2021, as the global advertising company posted better than expected results for the march quarter.
Organic growth for the three months was a negative 1.8%, far better than the -6.1% market analysts had expected.
Global revenue was up 0.6% to $US3.427 billion. Operating profit increased $US45.2 million, or 10.8%, to $US465.4 million.
"It has taken some time to turn the corner and we are now on a clear path to return to growth," says CEO John Wren.
"At the same time, we know that we must continue to monitor the COVID-19 situation and to adapt to any unforeseen challenges that may arise. If 2020 taught us anything it's through expecting unexpected."
Another global ad company, Publicis Groupe, last week reported a return to positive organic growth in the March quarter, posting a "solid" 2.8% for the three months, ahead of expectations.
Omnicom expects the global business to hit positive organic revenue growth in the second quarter of this year and for the full year 2021.
The company has restored dividends to shareholders, resumed a share buyback and has signalled an appetite for acquisitions.
Omnicom’s media businesses achieved positive organic growth for the first time since the 2020 March quarter.
Its business in Asia was in positive territory in the March quarter, with organic growth up 2.5%, including a “positive performance” from agencies in Australia. Growth was negative in Japan, New Zealand and Singapore.
In the March quarter, the media business in North America led growth in revenue. Organic growth was down 1%, an improvement over the negative 8% from the fourth quarter.
Advertising and Media and CRM (customer relationship management) Precision Marketing were positive in the US.
John Wren: “I'm proud to lead a company with an extraordinary group of people who continually deliver the best creative work in our industry from their unwavering dedication, creativity and innovation came a number of industry awards and recognition.”
Omnicom CFO Phil Angelastro says the impact of the COVID-19 pandemic on the global economy and client marketing spend appears to be moderating in certain major markets.
On the mix of revenue by discipline, 59% was for advertising and 41% for marketing services.
Advertising had organic growth of 1.2%.
Omnicom says global economic conditions will continue to be volatile s long as the COVID-19 pandemic remains a public health threat,
The company says: “We expect global economic performance and the performance of our businesses to vary by geography and discipline until the impact of the COVID-19 pandemic on the global economy moderates. We continuously assess the impact of the COVID-19 pandemic and adjust our response related to changes in our business.”
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