Omnicom Group posted fourth-quarter organic revenue growth of 9.5% as it worked through another year of the ongoing COVID-19 pandemic. 

This marked the holding company's third consecutive quarter of organic growth.

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Omnicom reported full-year 2021 worldwide organic growth of 10.2%, a turnaround from the deep 11.1% organic decline the company reported for 2020.

Organic growth is a key financial measure that factors out acquisitions, divestitures and effects of exchange rates.

On a late afternoon earnings call, Chairman-CEO John Wren said Omnicom forecasts full-year 2022 organic growth of 5% to 6% while maintaining the same 15.4% operating margin that Omnicom delivered in 2021.

“Overall, I'm very pleased with our financial performance for the quarter and year and optimistic about our prospects heading into 2022,” Wren said on the call.

Fourth-quarter results

Omnicom fourth-quarter organic revenue increased across all regions, compared with the same period a year earlier. Organic growth came in at 7.8% for the U.S, 1.8% for other North America, 10.1% for the U.K., 12.7% for the rest of Europe, 7.8% for Asia Pacific, 7.3% for Latin America and 48.1% for the Middle East and Africa.

Organic growth in the final quarter increased across all of Omnicom’s fundamental disciplines: 7.4% for Advertising, 19.6% for Precision Marketing, 12.4% for Commerce and Brand Consulting, 56.7% for Experiential, 5.2% for Execution & Support, 4.4% for Public Relations and 4.5% for Healthcare.

“Our improved performance was underpinned by our Precision Marketing discipline, which is helping clients transform their business so they can engage directly with their consumers through digital platforms,” Wren said.

The company also benefited from the continuing rebound in the experiential business, Wren said, as more in-person events resumed in the fourth quarter.

“The in-person execution type of business events, we anticipate that they're going to be a little slower in the first quarter, and possibly even the first five months of the year because of the [omicron] variant,” Wren said. “And that kind of put markets back on its heels a bit. But we see it fully coming back by the second half of the year.”

Worldwide revenue rose 2.6% to $3.86 billion in the fourth quarter.

The world’s second-largest agency company reported fourth-quarter net income of $416.2 million. Diluted earnings per share came in at $1.95.

The consensus forecast among analysts had been for fourth-quarter revenue of $3.67 billion and earnings per share of $1.71, according to investor site Seeking Alpha.

Full-year results

Worldwide revenue in 2021 increased 8.5% to $14.29 billion.

Worldwide revenue growth reflected organic growth of 10.2%, the positive effects of foreign currency translation of 2.2% and a decrease in revenue from acquisitions, net of disposition revenue, of 3.9%.

On the company’s last earnings call in October, Wren predicted full-year organic growth of “approximately 9%.”

Omnicom reported full-year net income of $1.41 billion.

Omnicom reported 2021 U.S. organic revenue growth of 8.1%, a rebound from an organic decline of 10.1% in 2020.

Among disciplines, Experiential had the strongest worldwide organic growth for the full year, up 27.0%, as event marketing began to emerge from its pandemic freeze.

Healthcare had the lowest organic growth among disciplines, up 4.0%, following the discipline’s outsized growth earlier in the pandemic.

Where Omnicom is looking for deals

Wren said Omnicom has “a number of conversations that are ongoing” for acquisitions.

Wren said: “We've been focused on the fastest-growing part of our business, which is the Precision Marketing, data and analytics, business transformation, consulting, e-commerce, ... performance media and health care. And our acquisition pipeline is in those areas.”

But Wren is keeping a watchful eye on price tags for deals. “I’ve never been happy, reaching into my pocket and paying a shekel more than I've had to,” he said.

Omnicom’s big fourth-quarter acquisition turned out to be a…building. The company paid about $575 million to buy its primary office building in London where about 5,000 Omnicom employees work at various agencies. It’s the company’s largest office building globally in its second-largest market. 

Results for other agency companies 

Omnicom is the second of the major agency companies to announce fourth-quarter results. 

Publicis Groupe last week reported a 9.3% increase in fourth-quarter organic net revenue and a 10.0% jump in full-year 2021 organic net revenue, boosted by new business wins including Meta’s global media business, McDonald’s media business and the CVS creative account.

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Interpublic Group of Cos. reports fourth-quarter results Feb. 10. Dentsu Group will announce its results Feb. 14. WPP will release its results Feb. 24.

Omnicom announced its results today after the stock market closed. Omnicom shares closed today at $78.92 up $1.51. Shares jumped more than 5% to $82.90 in after-hours trading.