Omnicom Group Inc.

Good afternoon and welcome to the Omnicom first quarter 2023 earnings release conference call. At this time, all participants are in a listen-only mode. Later, we'll 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 Lumbert.

Please go ahead. Thank you for joining our first quarter 2023 earnings call. With me today are John Wren, Chairman and Chief Executive Officer, and Phil Angelostro, 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 An archived version will be available when today's call concludes.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 would like to remind everyone to read the forward-looking statements and non-GAAP financial and other information that we've included at the end of our investor presentations. Certain of the statements made today may constitute forward-looking statements, and these statements represent 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 2022 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 for your questions. I'll now hand the call over to John.

Thank you, Greg. Good afternoon, everyone, and thank you all for joining us today. We're pleased to share our first quarter results. As we discussed on our last call, we entered 2023 extremely confident in our strategic and financial position. I'm pleased to report that for the first three months of the year, we met our internal revenue and margin targets. Organic growth in the first quarter was 5.2%. Our growth was broad-based across disciplines, geographic regions, and client sectors. Advertising and media, physician marketing, and public relations were the largest contributors in the quarter. Adjusted operating profit margin for the quarter was 13.5%. Non-GAAP adjusted earnings per share was $1.56, up 12.2%, versus non-GAAP adjusted EPS for Q1 2022. Our cash flow and balance sheet remain very strong and support our primary uses of free cash flow, dividends, acquisitions, and share repurchases. We're pleased with our results for the quarter and remain on track to achieve our full year targets of 3% to 5% organic growth and 15% to 15.4% operating margin. Strategically, we continue to invest in our creative leadership, with TBWA's recent acquisition of Dark Horses, a London-based award-winning sports marketing agency. Dark Horses operates in a high-growth area and works with a strong roster of global clients and influential sports organizations. While creativity remains a core part of our culture and organization, we continue to be recognized for our integrated suite of services across precision marketing, data, e-commerce, and other disciplines. Most recently, our capabilities were highlighted by AdAge, who named us their 2023 Holding Company of the Year. The publication noted that while still creative, Omnicom is a data-driven powerhouse, enabling marketers to transform their businesses using capabilities in e-commerce, consumer experience management, CRM, and more. Our ability to deliver increasingly specialized integrated services enables us to expand the work we do for our clients and remain a trusted advisor to them. In fact, in 2022, 100 of our largest clients were served on average by more than 50 of our agencies across different disciplines and geographies. As we move ahead, we continue to look for ways to strengthen our portfolio through acquisitions and investments in high-growth areas such as precision marketing, healthcare, e-commerce, media and PR, as well as in our core creative services. I'd like to now turn to how we are approaching the new way our people work, which has resulted in changes in our real estate. We created a plan that underlies our belief that our physical offices play a critical role in maintaining culture, inspiring creativity and innovation, and promoting professional development. Our approach also recognizes that providing flexibility creates benefits for the health and well-being of our people. With this in mind, we recently announced we are requiring our people to work in our offices a minimum of three days a week. In practice, many of our agencies are already at or well ahead of this requirement. Many are working a full week in the office. Based on this plan during the quarter, we made the decision to exit over 1.6 million square feet of office space around the world. Since 2018, we reduced our office footprint by 35%, while our employee headcount has increased by approximately 4,000. We are also experimenting with different approaches to make it easier for our people to return to the office. One example is in the New York metro area, where we are opening three satellite offices in Long Island, Connecticut, and New Jersey. We are also opening new Omnicom campuses in three cities in India, Chennai, Gurgaon and Hyderabad, as the number of employees in India continues to grow at a significant pace. Phil will cover the financial impact of our real estate actions during his remarks. Going forward, We continue to invest in new, modern workplaces that provides the type of environments most effective for collaboration and in-office work. We are also rapidly charting a path of how we use new technologies for the future of work. In the area of generative AI, through our large-scale relationship with Microsoft, we have established a dedicated Azure environment with secure enterprise access to the latest OpenAI GPT model. This unique setup is allowing us to responsibly develop new custom and version-controlled models against various use cases within Omni, as well as supporting overall automation and transformation efforts. The development includes careful consideration related to all aspects of generative AI. from confidentiality to intellectual property rights, privacy, biases, and ethics. In conclusion, we are pleased with how the year has started and remain on track to meet the targets we've set for the year. At the same time, we remain cautious as to how inflation, interest rates, the war in Ukraine, increasing tensions in the Middle East, and the recent banking and credit events in the United States could impact the economy and our operations. Many of these risks have been evident for quite some time, and we have developed plans to appropriately respond to any potential headwinds and minimize the effect on our financial performance. I will now turn the call over to Phil for a closer look at the financials. Phil?