Omnicom Group Inc.

Good afternoon and welcome to the Omnicom second quarter 2023 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. 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 Lumberg. Please go ahead.

Thank you for joining our second 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 An archived version will be available when today's call concludes.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'd 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 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 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, and then Phil will review our financial results for the quarter. After our prepared remarks, we will open up the line for your questions. And I will now hand the call over to John.

Thank you, Greg. Good afternoon, everyone, and thank you for joining us today. We're pleased to share our second quarter results. Organic growth was a solid 3.4% for the quarter, which was in line with our expectations. Adjusted operating income margin was also in line with our expectations at 15.1%. Adjusted diluted earnings per share for the quarter was $1.81, up 7.7% versus the comparable amount in 2022. On a constant currency basis, the increase was 8.9%. Our cash flow continues to support our primary uses of cash, dividends, acquisitions, and share repurchases, and our liquidity and balance sheet remain very strong. We are pleased with our financial results for the quarter and first half and are increasing our full-year organic growth target to 3.5% to 5%. and maintaining our 15 to 15.4% operating margin target. Phil will cover our results in more detail during his remarks. Operationally, we had a very successful quarter. We made significant progress on our AI strategy by adding generative AI to Omni, our market-leading technology platform, and entering into significant first-of-a-kind technology partnerships. We enhanced our capabilities and management team in e-commerce and retail media, solidified our position as the most creative holding company in the world at Cannes, and completed a couple of important strategic acquisitions. While we have engaged in AI for over a decade, generative AI will have a profound effect on our industry and Omnicom. We are quickly embracing the technology as we see massive opportunities to boost the productivity of our people and deliver better work to our clients. As with any new technology, we're working closely with our clients to take advantage of the benefits while being mindful of its limitations, risks, and privacy concerns. We have a significant competitive advantage in harnessing the power of generative AI through our open operating system, Omni. For over a decade, we've invested in the development of Omni. Today, more than 50,000 people use the platform in over 100 countries, and it houses over 1 billion IDs globally with data from first, second, and third parties. Generative AI will turbocharge Omni users by helping them harness, deploy, and activate this rich set of data. The open architecture of Omni makes it feasible for us to quickly adopt generative AI models from our key tech partners in a scalable, reliable, and secure environment. Equally important, our clients remain in control of their first-party data. In June, at the Cannes Lions Festival of Creativity, we announced the launch of Omni 3.0. the next generation operating system for Omni, where every experience will be powered by generative AI. The experience is delivered through OmniAssist and is the result of our partnership with Microsoft, which allowed us to be one of the first companies to be given full access to their chat GPT model. OmniAssist is a custom-trained enterprise-level Omnicom proprietary version of chat GPT that enhances every task within Omni including research, creating, planning, and executing marketing campaigns. OmniAssist will give our agency teams the power to do their jobs more efficiently and focus on high-impact work for our clients. Following the launch of Omni 3.0, we unveiled several other collaborations that will introduce generative AI capabilities directly to our creative work. The first was Google Marketing Cloud, which offered us the unique access to Vertex AI platform and Imagine. Imagine is a text-to-image model with copyright protections built in, enabling agency and client teams to accelerate the content development process for marketing campaigns. Next, we announced we were the first holding company to have access to Adobe's Firefly Creative Generative AI models. Combining these models with OmniData, we will be able to embed the power of Firefly into our clients' ecosystems to generate automated content in a brand's unique style and language. Finally, we shared our first-mover collaboration with Amazon Web Services. Pairing Omnicom's open operating system with AWS's generative AI services will enable the automation of advertising campaigns and the creative journey development on behalf of our brands. These collaborations feed directly into Omni and will accelerate our generative AI capabilities. Also announced at Cannes, we further expanded and strengthened our e-commerce and retail media capabilities by launching OmniCommerce, the industry's first connected commerce and orchestration solution. Omnicommerce provides a single, standardized, and customizable view of the commerce journey. With the retail media landscape becoming increasingly fragmented, Omnicommerce helps our clients harness the full power of retail media with a holistic view of their ROI. In June, we announced the appointment of Jacqueline Baker as CEO of the Omnicom Commerce Group. Jacqueline succeeds Sophie Durrani, who is stepping down to pursue consultancy and nonprofit opportunities. With over 20 years of commerce and brand building experience, Jacqueline has an established track record of driving innovation within the commerce landscape. While we've made substantial progress with Omni and General of AI, it's critically important to note that AI can never replace the inspiration and genius that comes from our people and their creativity. These technological advances will simply make it easier and faster for them to develop and deploy creative ideas. That's why I'm especially pleased we are recognized as the most creative company in the world at the Cannes Lions Festival of Creativity. Omnicom agencies from more than 40 countries won over 175 Lions throughout the week. Two of our creative networks, DDB and BBDO placed in the top three in the Network of the Year competition, with DDB coming in first and BBDO coming in third. We continue to invest in our global creative capabilities. In early July, we announced the acquisition of German-based Gabars and partner a world-class creative agency headquartered in Hamburg. Gabars has been named to prestigious industry lists such as Cannes Lions, top 10 independent agencies of the decade, and Campaign UK's world-leading independent agencies. Following the announcement of Gabar's, and together with certain management changes we recently made, Prezant, Germany's leading industry trade magazine, noted Omnicom has significantly strengthened its position in the world's fourth largest advertising market. Also in July, we expanded our media services, through the acquisition of Ptarmigan Media. Headquartered in London with several offices around the world, Ptarmigan is a specialist agency providing end-to-end media and marketing solutions to financial services brands. The agency's capability within the Omnicom Media Group will enable an unprecedented and singular depth of financial service industry and media planning and buying expertise. Overall, we're very pleased with our first half financial results and our progress in key strategic initiatives. While we remain optimistic for the second half of the year, we continue to plan cautiously given the number of uncertainties in the macroeconomic environment. I'll now turn the call over to Phil for a closer look at our financial results. Phil?