Omnicom Group Inc.

Good afternoon and welcome to the Omnicom fourth quarter and full year 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 Lundberg. Please go ahead.

Thank you for joining our fourth quarter and full year 2023 earnings call. With me today are John Wren, Chairman and Chief Executive Officer, and Phil Angelastro, Executive Vice President and Chief Financial Officer. Also joining for the question and answer session will be Duncan Painter, CEO of Flywheel Digital, and Paolo Uvienco, Omnicom Chief Technology Officer. On our website, omnicomgroup.com, is a press release and 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 An archived version will be available when today's call concludes.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 I 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 22 Form 10-K and our 23 10-K, which we expect to file shortly. 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'll begin the call with an overview of our business from John, then Phil will review our financial results for the quarter, and after our prepared remarks, we'll open up the line for your questions. I'll now hand the call over to John.

Thank you, Greg. Good afternoon, and thank you for joining us today for our fourth quarter and full year 2023 results. I'm pleased to report our fourth quarter performance was very strong. For the fourth quarter, Organic growth of 4.4% exceeded our expectations, and full-year organic growth was 4.1%. Excluding acquisition transaction fees related primarily to Flywheel, operating profit margin for the quarter was 16.3%. For the full year, operating profit margin adjusted for certain non-GAAP items was 15.2%. Earnings per share for the quarter adjusted for acquisition transaction fees was $2.20, up 5.3% versus the fourth quarter of 2022. For the full year, EPS adjusted for certain non-GAAP items was $7.41, an increase of 6.9% compared to the full year of 2022. In 2023, we generated approximately $1.9 billion in free cash flow and returned $1.1 billion to shareholders through dividends and share repurchases. Our liquidity and balance sheet remain very strong and continue to support our primary uses of cash, dividends, share repurchases, and acquisitions. On January 2nd, we closed the acquisition of Flywheel Digital. It is the biggest acquisition in Omnicom's history and brings scaled capabilities in the fastest-growing segments of the industry, retail media, and digital commerce. Flywheel enables brands to sell goods across digital marketplaces such as Amazon, Walmart, Alibaba, and more than 100 other marketplaces around the world. Flywheel opens up an entirely new market opportunity for Omicom, transforming us from an advertising and marketing-focused company to a marketing and sales focused company. We can now seamlessly integrate end-to-end services from brand media to precision marketing to e-commerce and in-store commerce, ultimately delivering superior results for our clients. In January, we began combining Omni's audience and behavioral data with Marketplace point-of-purchase sales data in Flywheel's Commerce Cloud, giving us an unmatched set of data not only to more effectively drive sales for clients, but to be fully able to measure return on advertising spend. It's a unique offering that no one has been able to achieve, and our competitors can't match. I'm also proud to inform you that last week, Flywheel captured its first significant win as part of Omnicom, winning the highly-owned e-commerce business in Europe from one of our competitors. This is a unique partnership and opportunity, In January, we welcomed CEO Duncan Painter and more than 2,000 flywheelers around the world to Omnicom, and we are excited about what we can achieve for our clients together. In the fourth quarter, we acquired Coffee & TV, a UK-based creative studio that specializes in CGI and visual effects. The acquisition is part of our strategy to leverage the scale of our production operations and launch a holistic suite of global content and production services under a single unit, Omnicom Content Studios. Omnicom Content Studios creates content for brands across all consumer experiences and touchpoints, from long and short-form videos to social, experiential, digital, and everything in between. In addition to these acquisitions, we continue to invest in high-growth areas through internal investments and partnerships. Last month at CES, we introduced several new ways to offer planning and measurement in the booming area of influencers. We announced several first-of-a-kind partnerships with TikTok, Google, Amazon, and Meta to optimize the use of influencers, seamlessly integrate creator assets in campaigns, and measure influencer-driven commerce. In November, we announced the first move of collaboration with Getty Images, that provides us early access to this new generative AI tool. It pairs Getty's library of creative content with Omni's data and AI technology, so our agencies can produce commercially safe and legally indemnified customized images for our clients. In 2023, we launched OmniAssist, a virtual assistant our people use to create, plan, and execute ad campaigns using the trove of data in Omni. OmniAssist accesses OpenAI's GPT models through Microsoft. As the first holding company and second company overall to be given full access to OpenAI models in Microsoft's Azure environment, we have a significant first-mover advantage, allowing us to experiment, prototype, and launch applications within our platform before any other organization. Historically, we've invested tens of millions of dollars in AI, Going forward, generative AI investments and partnerships to enhance our platforms and educate our knowledge workers are expected to require greater resources. These investments will result in increased productivity and success for our clients. From e-commerce to influences to generative AI, we're investing in all the areas that will shape the future of our industry. When these capabilities are combined with our legendary creativity, we remained positioned at the forefront of change and innovation. In new business, we had a very successful 2023. We secured record business with Amazon, Beiersdorf, HSBC, Jaguar, Land Rover, Novartis, Philips, Telstra, Uber, Under Armour, Vans, and Virgin Voyages, among others. And we closed the year with exciting news that BMW consolidated its U.S. Creative, Digital, and CRM and its media accounts with us. Before I discuss our outlook for 2024, I want to welcome the newest member of our board of directors, Casey Santos, who was recently appointed as an independent director and a member of the Finance Committee. Casey joins one of the most diverse boards within the Fortune 500. Now at 11 members, our board is proud to have seven women and six diverse members. Casey's deep expertise in technology makes her a valuable addition to our board. I also want to thank our people around the world for helping us successfully close out 2023. Your dedication and commitment to do outstanding work allow our agencies, clients, and Omnicom to succeed. We enter 2024 from a position of strength, supported by our solid financial performance and balance sheet, new business wins, and key strategic investments in the areas that will drive significant growth in the years ahead. While we continue to plan cautiously, given the uncertainties in the macroeconomic and geopolitical environment, based on current market conditions, we are targeting 2024 organic revenue growth between 3.5% to 5%. Our range of organic growth during the year will be impacted by new business one in the fourth quarter, which doesn't positively impact us until the second quarter, and flywheels growth, which is typically stronger in the second half of the year. I'll now turn the call over to Phil for a closer look at our financial results. Phil?