Omnicom Group Inc.

Good afternoon, ladies and gentlemen, and welcome to the Omnicom first quarter 2022 earnings release conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. To participate, please press 1 then 0. And if you need assistance during the call, please press star then 0. As a reminder, this conference call is being recorded. At this time, I'd like to introduce you to your host for today's conference. Senior Vice President of Investor Relations, Gregory Lundberg. Please go ahead.

Good afternoon. Thank you for joining our first quarter 2022 earnings call. With me today are John Wren, Chairman and Chief Executive Officer, and Phil Angelastro, Executive Vice President and Chief Financial Officer. On our website, omnicomgroup.com, we've posted a press release along with a presentation covering the information we'll review today, as well as a webcast of this call. An archived version will be available when today's call concludes. Before we start, I'd like to remind everyone to read the forward-looking statements, non-GAAP financial and other information that we have included at the end of our investor presentation. Certain of the statements made today may constitute forward-looking statements, and these statements are our present expectations. Relevant factors that could cause actual results to differ materially are listed in our earnings materials and in our SEC filings, including our 2021 Form 10-K. During the course of today's call, we will also discuss certain non-GAAP measures. You can find the reconciliation of these to the nearest comparable GAAP measures in the presentation materials. We will begin the call with an overview of our business from John, then Phil will review our financial results for the quarter. After our prepared remarks, we will open the line up for your questions. I'll now hand the call over to John.

Thank you, Craig. Good afternoon, everybody, and thank you for joining today. We are pleased to share our first quarter results. Before I discuss our performance, I want to address the ongoing war in the Ukraine. We continue to be witness to this horrific war and our focus remains the safety and wellbeing of our Ukrainian colleagues and their families. We've been in constant contact with our agency leaders in the Ukraine and continue to deliver needed humanitarian assistance and support. I was privileged to meet our senior regional leaders in Warsaw a few weeks ago. I continue to admire the tremendous bravery of our Ukrainian colleagues as they defend their country and protect their families. Since the onset of the war, our teams in the region from Poland, Czech Republic, Romania, Slovakia, Bulgaria, and Hungary have been providing extraordinary support to their co-workers from Ukraine. It was truly remarkable to see. I'm honored to lead a company with a culture of caring and compassion that displays such unity and strength. I want to extend my gratitude to our people around the world that have selflessly and tirelessly worked to help our Ukrainian colleagues. We hope for an end to these atrocities and a peaceful resolution to the war. Omnicom will continue to offer whatever assistance is necessary and will support our people for as long as needed. Turning now to our financials, we increased our operating margin and exceeded our expectations for the quarter with organic growth of 11.9%. We made the decision to withdraw from Russia and dispose of our operations. As a result, the financials for the quarter reflect our Russian business only through the end of February. We also took a charge arising from the effects of the war in the Ukraine. Phil will provide more details during his remarks. Our revenue growth and margin performance in the quarter was very strong across all geographies and disciplines. Our revenue performance reflects the continuing investments that our clients are making to strengthen their marketing, branding, consumer experience, e-commerce, and digital transformation efforts in a rapidly evolving digital economy. Operating profit margin for the quarter, excluding the charge arising from the effects of the war in the Ukraine, was also very strong at 13.7%. This is 10 basis points higher than our margin in 2021. I want to compliment our agency management teams for growing their businesses while tightly managing costs in line with revenue growth. Earnings per share for the quarter, excluding the charge, was $1.39, up 4.5% versus 2021. Finally, our cash flow and balance sheet remained very strong and support our primary uses of cash, dividends, acquisitions, and share repurchases. During the quarter, we continue to invest internally and through accretive acquisitions in high-growth areas like CRM and precision marketing, digital transformation and martech, data and analytics, e-commerce, performance media, and the health sector. In the quarter, we acquired TA Digital, a leading global digital experience consultancy. The acquisition further expands the digital transformation, content management, commerce, and customer experience capabilities within the Precision Marketing Group. Throughout the group, our agencies are delivering connected consumer experiences across media and commerce platforms within owned, paid, and earned environments. All of this is enabled by OmniID, a proprietary person-based identity solution delivering reach and precision that is part of our Omni open operating system. OmniID is built to be privacy compliant and is a future-proof framework for a post-cookie marketplace. It delivers the highest possible degree of first-party and CRM data management, control, and governance. Our investments in these high-growth areas in our data and technology capabilities and in our best-in-class talent have positioned us extremely well to service our clients now and in the future. I want to take a moment to welcome and congratulate two new members of our Board of Directors, Patricia Salas Pineda, and Mark Gerstein. The diversity of Omnicom's board is something we take pride in, especially as we look to continue to improve diversity, equity, and inclusion throughout our entire organization. At the end of 2021, we saw meaningful progress in our workforce diversity across all professional levels in the United States. We're not done and will continue to drive improvements throughout 2022. Overall, we're very pleased with our quarterly results. While we're off to a strong start in 2022, we continue to plan cautiously for the remainder of the year, given the ongoing war in the Ukraine, the effects of the pandemic across markets, the continuing disruption of global supply chains, and the economic risks posed by higher inflation and oil prices. With that said, given our strong performance in the first quarter, we are increasing our forecast for organic growth to between 6% and 6.5% for the full year 2022, and we anticipate delivering the same strong operating margins for the full year 2022 that we delivered in 2021. I'm confident we'll continue to operate at a high level through this business cycle as our agencies remain an integral partner in growing our clients' businesses. I want to thank our people around the world for your compassion and dedication. You have continued to produce incredible work for our clients. Your resilience not only drives our financial success, it defines who we are as a company. So thank you once again. I want to now turn the call over to Phil for a closer look at our financials.