Omnicom PR revenue up 2.5% in third quarter

Omnicom Group's PR revenue was up 2.5% on an organic basis to $343.3 million in the third quarter of this year.

Omnicom CEO John Wren
Omnicom CEO John Wren

NEW YORK: Omnicom Group’s PR revenue was up 2.5% on an organic basis to $343.3 million in the third quarter of this year, according to results released on Tuesday morning.

For the year to date, PR revenue was up 2.6% organically to $1.03 billion. The holding company owns and operates FleishmanHillard, Ketchum, Porter Novelli, and Marina Maher Communications, among others.

Overall, Omnicom’s revenue increased 6.5% organically in the period to $3.75 billion, including an 8.9% organic increase in North America. 

The company reported domestic revenue of $2 billion and international billings of $1.8 billion. Revenue was up 5.6% organically in the first nine months of the year, compared with the same period in 2013, to $11.1 billion.

Operating income in Q3 was up 14.2% to $433.6 million, while net income was up 21.8% to $273.6 million. 

For the first nine months of the year, operating income was up 7.1% to $1.3 billion, while operating margins increased to 12.3% from 12.1% compared with last year. Net income for the first nine months of the year was $774.5 million.

In terms of individual markets, the holding company saw 8.9% organic growth in North America to $2.1 billion, compared with 2.2% in Europe to $1 billion; 4.4% in Asia-Pacific to $405.3 million; 2.5% in Latin America to $102.6 million; and 18.1% in Africa and the Middle East to $63.8 million.

For the first nine months, North American revenue improved 7.2% organically to $6.3 billion, while European sales were up 2.2% to $3.2 billion. Revenue in Asia-Pacific jumped 5.0% to $1.2 billion, while Latin America was up 6% to $306.1 million, and Africa and the Middle East was up 8.6% to $182.7 million. 

Broken down by discipline, the holding company’s Q3 advertising revenue was up 12.5% organically to $1.9 billion, while CRM increased 1% to $1.3 billion and specialty communications decreased 0.1% in the quarter to $246.3 million.

For the first nine months of the year, advertising revenue increased 9.3% organically to $5.5 billion; CRM was up 2.1% to $3.8 billion; and specialty communications increased 1.7% to $770 million.

The Q3 results come roughly six months after Omnicom’s cancelled merger with French holding company rival Publicis Groupe. Year-to-date 2014 results include $8.8 million of pre-tax charges in connection with the proposed merger, which were mostly professional fees, according to the holding company’s earnings statement

Organic growth represents change in revenue without taking into account the impact of acquisitions or disposals.

Last month, longtime Omnicom CFO Randall Wiesenburger announced his plan to leave the company and return to private equity.

"We performed well above the sector as reported," Dave Senay, FleishmanHillard’s president and CEO, told PRWeek via email.

In July, NYU Langone Medical Center, home to New York University’s school of medicine, named FleishmanHillard as its AOR; and in August, the firm was awarded a contract extension from the Illinois Department of Insurance worth nearly $25.6 million to promote the state’s health-insurance marketplace.

In addition, FleishmanHillard recently expanded its operations to Sao Paulo through a partnership with Brazilian communications holding company Grupo In Press.

Meanwhile, Porter Novelli’s CEO Karen van Bergen told PRWeek via email that her firm had a strong quarter marked by marquee wins in its global technology practice, including SanDisk and Citrix. Both account wins took place earlier this month.

"We have solid momentum going into Q4 and expect to see more big wins on the horizon," she added.

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