Omnicom reported first quarter net income of $287.8 million vs. $258.1 million in the year-ago quarter. Diluted net income per share came in at $1.33 vs. $1.19 in the first quarter of 2020.
Omnicom’s earnings report comes after Publicis Groupe released its first-quarter earnings last week, reporting organic growth of 2.8% for the first quarter. Publicis was helped by strong performance in the U.S and Asia, with the U.S growing organically by 5.1%. This is a contrast from Omnicom, which reported a 1.0% decrease in the U.S.
Omnicom, like Publicis, continues to report weakness in its European business. Omnicom said U.K. organic revenue decreased by 6.4% in the first quarter, and other parts of Europe decreased by 3.2% as COVID variants have impacted the region and the vaccination efforts lag behind countries like the U.S.
“Uneven rates of vaccination and recovery around the world could result in earnings drag on sprawling multinational holding companies,” Ad Age's Judann Pollack wrote in a recent article. “And while certain businesses at the Big 5 agency holding companies have performed well across the board in the pandemic—namely health care, digital and e-commerce—they are still weighed down in major sectors like live events.”
Notable, Omnicom's CRM experiential discipline reported a 33.2% decrease in organic growth in the first quarter. However, Wren sees an upside on the horizon when live events open up globally especially in China, the Middle East and Western Europe.
"I like the business that we have for it [CRM experiential] long-term,” Wren said. “We are probably more positive than other people, and that might even be an additional boost when things do open up, because a lot of people haven't had the staying power to continue those businesses during this period of time.”
Omnicom reported first-quarter organic growth for other disciplines as follows: Advertising increased 1.2%, CRM precision marketing increased 7.2%, CRM commerce and brand consulting decreased 4.2%, CRM execution and support decreased 13.3%, public relations decreased 3.5% and health care was flat.
Omnicom continues to look forward, having just announced two acquisitions in the past week. Omnicom Health Group acquired Archbow Consulting, which helps pharmacutical and biotech companies design, build and optimize product distribution and patient access strategies. Secondly, Omnicom issued a press release saying it had agreed to take a majority stake in technology firm Areteans Technology Solutions, which uses technology, including customer relationship management software from Pegasystems, to help clients acquire and retain customers as well as to build digital marketing and e-commerce capabilities.
Two more major holding companies, Interpublic Group of Cos. and WPP, will be reporting their first-quarter results on April 28.