What changed in this filing

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Item 1. Business

2023-02-08 compared with 2022-02-09 · 46 added, 46 removed, 63 unchanged (59% of the section changed)

Omnicom is a strategic holding company providing advertising, marketing and corporate communications services to clients through our branded networks and agencies around the world.

Omnicom is a strategic holding company providing advertising, marketing and corporate communications services to many of the largest global companies.

Our portfolio of companies includes our global networks, BBDO, DDB, TBWA, Omnicom Media Group, the DAS Group of Companies, and the Communications Consultancy Network.

All of our global networks integrate their service offerings with the Omnicom branded practice areas, including the Omnicom Health Group, the Omnicom Precision Marketing Group, the Omnicom Commerce Group, the Omnicom Advertising Collective, the Omnicom Public Relations Group, and the Omnicom Brand Consulting Group, as well as our Experiential businesses and Execution & Support businesses, which includes the Omnicom Specialty Marketing Group.

We operate in a highly competitive industry and compete against other global, national and regional advertising and marketing services companies, as well as technology, social media and professional services companies.

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These developments make it more complex for marketers to reach their target audiences in a cost-effective way, causing them to turn to global service providers such as Omnicom for a customized mix of advertising and marketing services designed to optimize their total marketing expenditure.

On a global, pan-regional and local basis, our networks and agencies provide a comprehensive range of services in the following fundamental disciplines:

Advertising, Precision Marketing, Commerce & Brand Consulting, Experiential, Execution & Support, Public Relations and Healthcare.

Advertising includes creative services across digital and traditional media, strategic media planning and buying, and data analytics services.

Precision Marketing includes digital and direct marketing, digital transformation and data and analytics.

Commerce & Brand Consulting services include brand consulting, strategy and research, and retail ecommerce.

On a global, pan-regional and local basis, our networks, practice areas and agencies provide a comprehensive range of services in the following fundamental disciplines:

Advertising & Media, Precision Marketing, Commerce & Brand Consulting, Experiential, Execution & Support, Public Relations and Healthcare.

Advertising & Media includes creative services across digital and traditional media, strategic media planning and buying, performance media and data analytics services.

Precision Marketing includes digital and direct marketing, digital transformation consulting and data and analytics.

Commerce & Brand Consulting services include brand and product consulting, strategy and research, retail marketing and ecommerce marketing.

Experiential marketing services include live and digital events and experience design and execution.

Execution & Support includes field marketing, sales support, digital and physical merchandising and point-of-sale, as well as other specialized marketing and custom communications services.

Execution & Support includes field marketing, digital and physical merchandising, point-of-sale and product placement, as well as other specialized marketing and custom communications services.

Public Relations services include corporate communications, crisis management, public affairs and media and media relations services.

Healthcare includes advertising and media services to global healthcare and pharmaceutical clients.

Healthcare includes corporate communications and advertising and media services to global healthcare and pharmaceutical companies.

As a leading global advertising, marketing and corporate communications company, we operate in all major markets.

Our geographic markets include:

the Americas, which includes North America and Latin America, Europe, the Middle East and Africa (EMEA), and Asia Pacific.

Our business model was built and continues to evolve around our clients.

While our networks, practice areas and agencies operate under different names and frame their ideas in different disciplines, we organize our services around our clients.

Our fundamental business principle is that our clients’ specific marketing requirements are the central focus of how we structure our service offerings and allocate our resources.

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We use our client-centric approach to grow our business by expanding our service offerings to existing clients, moving into new markets and obtaining new clients.

In addition, we pursue selective acquisitions of complementary companies with strong entrepreneurial management teams that currently serve or could serve our existing clients.

In addition to collaborating through our client service models, our agencies and networks collaborate across internally developed technology platforms.

Annalect, our proprietary data and analytics platform, serves as the strategic resource for all of our agencies and networks to share when developing client service strategies across our virtual networks.

Omni, our people-based precision marketing and insights platform, identifies and defines personalized consumer experiences at scale across creative, media and other disciplines.

Annalect and Omni, our proprietary data and analytics platforms, serve as the strategic resource for all of our agencies and networks to share when developing client service strategies across our virtual networks.

These platforms provide precision marketing and insights at scale across creative, media and other disciplines.

Driven by our clients’ continuous demand for more effective and efficient marketing activities, we strive to provide an extensive range of advertising, marketing and corporate communications services through various client-centric networks that are organized to meet specific client objectives.

Our service offerings include:

advertising investor relations

branding marketing research

content marketing media planning and buying

advertising marketing research

branding media planning and buying

content marketing retail media planning and buying

corporate social responsibility consulting merchandising and point of sale

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database management organizational communications

digital/direct marketing package design

digital transformation product placement

digital/direct marketing and post-production services package design

digital transformation consulting product placement

entertainment marketing promotional marketing

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financial/corporate business-to-business advertising retail marketing

graphic arts/digital imaging sales support

graphic arts/digital imaging retail media and ecommerce

healthcare marketing and communications search engine marketing

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interactive marketing social media marketing

sports and event marketing

investor relations sports and event marketing

Certain business trends have impacted our business and industry.

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We have structured our business around these trends.

We believe that our key client matrix organization structure approach to collaboration and integration of our services and solutions provides a competitive advantage to our business in the past and we expect this to continue over the medium and long term.

Our key client matrix organization structure facilitates superior client management and allows for greater integration of the services required by the world’s largest brands.

We believe that our key client matrix organization structure approach to collaboration and integration of our services and solutions have provided a competitive advantage to our business in the past and we expect this to continue over the medium and long term.

Our key client matrix organization structure facilitates superior client management and allows for greater integration across our service platforms.

Our overarching strategy is to continue to use our virtual client networks to grow our business relationships with our largest clients by serving them across our networks, disciplines and geographies.

As the impact of the COVID-19 pandemic on the global economy moderated, we experienced improvement in our business in 2021 as compared to 2020.

In 2021, revenue increased $1,118.3 million, or 8.5%, compared to 2020.

The increase in revenue primarily reflects increased client spending in all our disciplines and across all our geographic areas compared to the prior year and the strengthening of most foreign currencies, primarily the British Pound and the Euro, against the U.S.

The increase in revenue year-over-year was impacted by a reduction in acquisition revenue, net of disposition revenue, primarily due to the sale of a specialty media business in the second quarter of 2021.

Global economic conditions may continue to be volatile as long as the COVID-19 pandemic remains a public health threat.

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 subsides.

We continually evaluate our portfolio of businesses to identify areas for investment and acquisition opportunities, as well as to identify non-strategic or underperforming businesses for disposition.

For information about our acquisitions and dispositions, see Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, - Acquisitions and Goodwill and Notes 5 and 13, respectively, to the consolidated financial statements.

In the three years ended December 31, 2021, none of our acquisitions or dispositions, individually or in the aggregate, was material to our results of operations or financial position.

The various components of our business, including revenue by discipline and geographic area, and material factors that affected us in 2021, are discussed in the MD&A.

In each of the three years ended December 31, 2022, none of our acquisitions or dispositions, individually or in the aggregate, was material to our results of operations or financial position.

The various components of our business, including revenue by discipline and geographic area, and material factors that affected us in the three years ended December 31, 2022, are discussed in the MD&A.

Our clients operate in virtually every sector of the global economy.

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For example, in 2022, our largest client represented 2.7% of revenue and was served by approximately 90 of our agencies.

Our 100 largest clients, many of which represent the largest global marketers, represented approximately 54% of revenue and were each served, on average, by approximately 52 of our agencies.

Our 100 largest clients, many of which represent the largest global companies, represented approximately 53% of revenue and were each served, on average, by approximately 54 of our agencies.

Although we have a large and diverse client base, we are not immune to general economic downturns.

Government Regulations

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Risk Factors - Regulatory Risks .

Human Capital Resources/Environmental, Social and Governance (ESG)

Human Capital Resources and Environmental Sustainability Initiatives

Our employees are our most important assets.

We believe a critical component to our success depends on the ability to attract, develop and retain key personnel.

We believe a critical component of our success depends on the ability to attract, develop and retain key personnel.

The skill sets of our workforce across our agencies and within each discipline are similar.

Common to all is the ability to understand a client’s brand or product and its selling proposition and to develop a unique message to communicate the value of the brand or product to the client’s target audience, whether through traditional channels or emerging

digital platforms.

Recognizing the importance of this core competency, we support and develop our employees through training and development programs that build and strengthen employees’ leadership and professional skills.

Human capital management strategies are developed collectively by senior management, including the management teams of the Company’s networks and practice areas, and are overseen by the Company’s Board of Directors.

Human capital management strategies are developed collectively by senior management, including the management teams of our networks, practice areas, and agencies, and are overseen by our Board of Directors.

We are committed to efforts that ensure that the workplace is equitable, ethical, fosters an inclusive work environment across our global workforce and respects human rights.

Our social and human capital management priorities include, among other things, adopting codes of conduct and business ethics, providing competitive wages and benefits, comprehensive training programs, succession planning, promoting diversity and inclusion and implementing technology platforms that prioritize the achievement of systemic equity throughout the Company.

Our social and human capital management priorities include, among other things, adopting codes of conduct and business ethics, providing competitive wages and benefits, comprehensive training programs, succession planning, promoting diversity and inclusion and implementing programs that prioritize the achievement of systemic equity throughout our organization.

At December 31, 2022, we employed approximately 74,200 people worldwide, including 31,500 people in the Americas, 27,500 people in EMEA, and 15,200 people in Asia Pacific.

Our largest employee base is the United States, where we employed approximately 25,600 people.

None of our regular employees in the United States are represented by a labor union.

In certain countries outside the United States, primarily in Europe, some employees are represented by work councils.

See the MD&A for a discussion of the effect of salary and related costs on our results of operations.

Our environmental sustainability initiatives focus on efficiency of office space, energy usage and travel.

In connection with our ESG efforts, we are a signatory to the UN Global Compact, a principle-based framework to encourage businesses and firms worldwide to adopt sustainable and socially responsible policies.

In connection with our environmental sustainability efforts, we are a signatory to the UN Global Compact, a principle-based framework to encourage businesses and firms worldwide to adopt sustainable and socially responsible policies.

We support the UN Sustainable Development Goals, a collection of global goals designed to be a blueprint to achieve a better, more inclusive and sustainable future.

Also, we are committed to joining the Science-Based Target Initiative (SBTi), which publicly audits companies on their emissions reduction efforts.

At December 31, 2021, we employed approximately 71,700 people worldwide.

The United States, our largest employee base, employed approximately 22,600 people.

None of our regular employees in the United States are represented by a labor union.

The approximate number of employees in our principal geographic regions at December 31, 2021 were 29,800 in the Americas, 28,800 in Europe, the Middle East and Africa, or EMEA, and 13,100 in Asia Pacific.

Certain employees in a few countries outside the United States, primarily in Europe, are represented by work councils.

See the MD&A for a discussion of the effect of salary and related costs on our results of operations.

Information About Our Executive Officers

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Angelastro Executive Vice President and Chief Financial Officer 58

O’Brien Executive Vice President, General Counsel and Secretary 60

Castellaneta Senior Vice President, Chief Accounting Officer 64

Swiecicki Senior Vice President, Finance and Controller 63

Januzzi Senior Vice President, General Counsel and Secretary 49

Tarlowe Senior Vice President and Treasurer 52

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Simm was named President and Chief Operating Officer in November 2021 and previously served as Chief Executive Officer of Omnicom Media Group for more than 20 years.

Januzzi was named Senior Vice President, General Counsel and Secretary in December 2022 and previously served as Senior Vice President & Deputy General Counsel - Corporate from May 2021 to December 2022 and as Associate General Counsel - Corporate Development & Finance from March 2016 to May 2021.

Tarlowe was named Senior Vice President and Treasurer in May 2019 and previously served as Senior Vice President and Treasurer of Avis Budget Group from 2007 until April 2019.

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Available Information

We file annual, quarterly and current reports, proxy statements and other information with the SEC.

We file annual, quarterly and current reports and any amendments to those reports, proxy statements and other information with the SEC.

Documents we file with the SEC are available free of charge on our website at http://investor.omnicomgroup.com, as soon as reasonably practicable after such material is filed with the SEC.

Any document we file with the SEC is available on the SEC’s website at www.sec.gov.

The information included on or available through our website is not part of this or any other report we file with the SEC.

Any document that we file with the SEC is available on the SEC’s website at www.sec.gov.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business