Omnicom CEO ‘bullish’ following 6.5% organic growth

Omnicom’s chief is “bullish” about the agency network’s outlook after a string of high-profile account wins accelerated the company’s organic growth to 6.5% in the third quarter. 

John Wren delivered a sunny address to investors on Tuesday following the release of Omnicom Group’s September earnings, which surpassed expectations with revenue of $3.88 billion and net income of $385.9 million, up 9% and 4% year on year, respectively.

Organic growth climbed from 5.2% in the second quarter and 4% in the first quarter, with all regions posting positive growth after Asia-Pacific and North America minus the U.S. both slipped into the red in Q2.

Omnicom Media Group’s September win of Amazon’s media account in the Americas was a particular boon, believed to be the biggest pitch the industry has ever encountered. OMG also won Michelin’s global media business in the quarter, catapulting the group to second place on Campaign Red’s latest global new-business league.

The upcoming U.S. election represents both a revenue driver and a “significant market uncertainty” for Omnicom, Wren noted on an investor call on Tuesday evening, alongside the ongoing conflicts in Ukraine and the Middle East. Despite uncertainties, the company maintained its 4% to 5% organic growth guidance for the year.

World events aren’t the only turbulent factors at Omnicom. The agency network announced a substantial reorganisation in August to bring its creative agencies BBDO, DDB and TBWA under one umbrella unit called the Omnicom Advertising Group (OAG). The model follows a structure Omnicom has implemented in other disciplines, including Omnicom Media Group, Omnicom PR Group and Omnicom Health Group.

While the restructure may appear to be an efficiency drive, Wren downplayed the cost savings impact as “de minimis,” suggesting it is designed as “waste avoidance more than anything else.”

“We weren't looking to cut heads,” he said on the investor call. “We were looking to improve the quality of the products of our brands and the tools that those folks had available to them.”

Shares fell more than 2% in after-hours trading.

In September, Omnicom’s share price set a new record after breaking the $100 barrier.