Omnicom Group reports 12% drop in global revenue in FY2020
Omnicom Group has reported its worldwide revenue for the 12 months to 31 December 2020 decreased 12% to US$13.17 billion from US$14.95 billion in 2019.
The group attributed the impact on revenue to the COVID-19 pandemic in the second through fourth quarters of 2020.
Net income for the 12 months ended 31 December 2020 includes a net after-tax decrease of $146.8 million as a result of COVID-19 repositioning costs and a net loss on dispositions during the second quarter of 2020, asset impairment charges recorded during the fourth quarter of 2020, and credits related to reimbursements and tax credits under government programs in several countries where it has operations, such as Australia.
The impact of these items reduced salary and related service costs and increased operating profit by $162.6 million for the 12 months ended December 31, 2020.
Across all of its regional markets, organic growth was negative for the 12 months ended 31 December 2020 as compared to the same period of 2019. The decreases were as follows: Asia Pacific 8.5%, the United States 10.1%, Other North America 10.0%, the United Kingdom 11.5%, the Euro Markets & Other Europe 12.8%, , Latin America 15.1% and the Middle East & Africa 32.3%.
Organic growth for the 12 months ended December 31, 2020 compared to the same period in 2019 in its five main business areas was as follows: Advertising decreased 12.2%, CRM Consumer Experience decreased 15.8%, CRM Execution & Support decreased 15.1%, Public Relations decreased 4.2% while Healthcare increased 3.3%.
The results stated: “During the second quarter of 2020, we realigned our agencies’ cost structures, which included severance actions and furloughs to reduce the workforce, right-of-use asset impairments and other real estate costs, a net loss on the disposition of certain subsidiaries and other charges. These COVID-19 repositioning actions were taken to tailor their services and capabilities to changes in client demand.”
As a result of the ongoing impact of the pandemic, Omnicom Group reported worldwide revenue in the fourth quarter of 2020 decreased 9.3% to $3.7 billion from $4.14 billion in the fourth quarter of 2019.
The company statement read: “Overall, while we have a diversified portfolio of service offerings, clients and geographies, demand for our services can be expected to decline as marketers reduce expenditures in the short term due to the uncertain impact of the pandemic on the global economy.”
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Olivia Kruimel is the managing editor at Mumbrella. She has more than 15 years of experience in journalism, communications and marketing. Her journalism career began at Fairfax Media (now part of Nine) and includes various B2B publications such as B&T, Travel Today and ALB. As a marketer Olivia has worked for Standard Chartered and various global law firms.
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