UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-10551

OMNICOM GROUP INC.

(Exact name of registrant as specified in its charter)

New York	13-1514814
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
280 Park Avenue, New York, NY	10017
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 415-3600

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbols	Name of each exchange on which registered
Common Stock, $0.15 Par Value	OMC	New York Stock Exchange
0.800% Senior Notes due 2027	OMC/27	New York Stock Exchange
1.400% Senior Notes due 2031	OMC/31	New York Stock Exchange
2.250% Senior Notes due 2033	OMC/33	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐	Non-accelerated filer	☐
Smaller reporting company	☐			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of July 12, 2023, there were 197,571,297 shares of Omnicom Group Inc. Common Stock outstanding.

OMNICOM GROUP INC.

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2023

TABLE OF CONTENTS

PART I.	FINANCIAL INFORMATION	Page
Item 1.	Financial Statements
	Consolidated Balance Sheets - June 30, 2023 and December 31, 2022	1
	Consolidated Statements of Income - Three and Six Months Ended June 30, 2023 and 2022	2
	Consolidated Statements of Comprehensive Income - Three and Six Months Ended      June 30, 2023 and 2022	3
	Consolidated Statements of Equity - Three and Six Months Ended June 30, 2023 and 2022	4
	Consolidated Statements of Cash Flows - Six Months Ended June 30, 2023 and 2022	5
	Notes to Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
	Forward-Looking Statements	14
	Executive Summary	14
	Consolidated Results of Operations	17
	Non-GAAP Financial Measures	25
	Liquidity and Capital Resources	25
	Critical Accounting Estimates	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 5.	Other Information	31
Item 6.	Exhibits	31
SIGNATURES		31

i

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

OMNICOM GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions)

	June 30, 2023		December 31, 2022
	(Unaudited)
ASSETS:
Current Assets:
Cash and cash equivalents	$	2,734.1	$	4,281.8
Short-term investments	75.9		60.7
Accounts receivable, net of allowance for doubtful accounts of $27.0 and $24.7	7,460.1		8,097.1
Work in process	1,638.0		1,254.6
Other current assets	904.3		918.8
Total Current Assets	12,812.4		14,613.0
Property and Equipment at cost, less accumulated depreciation of $1,133.0 and $1,167.5	883.2		900.1
Operating Lease Right-Of-Use Assets	1,072.9		1,165.0
Equity Method Investments	67.1		66.2
Goodwill	9,703.4		9,734.3
Intangible Assets, net of accumulated amortization of $823.1 and $819.9	289.0		313.4
Other Assets	239.6		210.5
TOTAL ASSETS	$	25,067.6	$	27,002.5
LIABILITIES AND EQUITY:
Current Liabilities:
Accounts payable	$	9,948.8	$	11,000.2
Customer advances	1,159.7		1,492.3
Short-term debt	20.5		16.9
Taxes payable	175.3		300.0
Other current liabilities	1,996.9		2,243.4
Total Current Liabilities	13,301.2		15,052.8
Long-Term Liabilities	806.9		837.5
Long-Term Liability - Operating Leases	850.1		900.0
Long-Term Debt	5,613.7		5,577.2
Deferred Tax Liabilities	506.8		475.7
Commitments and Contingent Liabilities (Note 13)
Temporary Equity - Redeemable Noncontrolling Interests	329.5		382.9
Equity:
Shareholders’ Equity:
Preferred stock	—		—
Common stock	44.6		44.6
Additional paid-in capital	585.8		571.1
Retained earnings	10,051.4		9,739.3
Accumulated other comprehensive income (loss)	(1,354.2)		(1,437.9)
Treasury stock, at cost	(6,174.1)		(5,665.0)
Total Shareholders’ Equity	3,153.5		3,252.1
Noncontrolling interests	505.9		524.3
Total Equity	3,659.4		3,776.4
TOTAL LIABILITIES AND EQUITY	$	25,067.6	$	27,002.5

The accompanying notes to the consolidated financial statements are an integral part of these statements.

1

OMNICOM GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In millions, except per share amounts)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
REVENUE	$	3,609.9	$	3,567.2	$	7,053.2	$	6,977.5
OPERATING EXPENSES:
Salary and service costs	2,617.8		2,566.0		5,160.7		5,057.8
Occupancy and other costs	297.7		293.0		589.3		593.2
Real estate and other repositioning costs	72.3		—		191.5		—
Charges arising from the effects of the war in Ukraine	—		—		—		113.4
Gain on disposition of subsidiary	(78.8)		—		(78.8)		—
Cost of services	2,909.0		2,859.0		5,862.7		5,764.4
Selling, general and administrative expenses	99.1		110.9		188.3		207.6
Depreciation and amortization	51.1		55.7		105.0		110.9
Total Operating Expenses	3,059.2		3,025.6		6,156.0		6,082.9
OPERATING INCOME	550.7		541.6		897.2		894.6
Interest Expense	57.5		51.2		112.4		102.2
Interest Income	30.1		11.1		65.7		19.3
INCOME BEFORE INCOME TAXES AND INCOME FROM EQUITY METHOD INVESTMENTS	523.3		501.5		850.5		811.7
Income Tax Expense	141.2		133.1		224.6		248.6
Income From Equity Method Investments	1.1		1.6		1.2		1.5
NET INCOME	383.2		370.0		627.1		564.6
Net Income Attributed To Noncontrolling Interests	16.9		21.6		33.3		42.4
NET INCOME - OMNICOM GROUP INC.	$	366.3	$	348.4	$	593.8	$	522.2
Net Income Per Share - Omnicom Group Inc.:
Basic	$	1.84	$	1.70	$	2.96	$	2.53
Diluted	$	1.82	$	1.68	$	2.92	$	2.51
Weighted Average Shares:
Basic	198.9		205.3		200.6		206.8
Diluted	201.6		206.9		203.1		208.3

The accompanying notes to the consolidated financial statements are an integral part of these statements.

2

OMNICOM GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In millions)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
NET INCOME	$	383.2	$	370.0	$	627.1	$	564.6
OTHER COMPREHENSIVE INCOME:
Cash flow hedge:
Amortization of loss included in interest expense	1.4		1.4		2.8		2.8
Income tax effect	(0.4)		(0.4)		(0.8)		(0.8)
Cash flow hedge, net of tax	1.0		1.0		2.0		2.0
Defined benefit pension plans and postemployment arrangements:
Amortization of prior service cost	1.0		1.1		2.1		2.1
Amortization of actuarial losses	0.2		1.4		0.4		3.0
Income tax effect	0.1		(1.1)		(0.8)		(2.4)
Defined benefit pension plans and postemployment arrangements, net of tax	1.3		1.4		1.7		2.7
Foreign currency translation adjustment	24.5		(287.2)		76.2		(259.1)
Other Comprehensive Income	26.8		(284.8)		79.9		(254.4)
TOTAL COMPREHENSIVE INCOME	410.0		85.2		707.0		310.2
Comprehensive Income Attributed To Noncontrolling Interests	13.3		2.9		29.5		24.4
COMPREHENSIVE INCOME - OMNICOM GROUP INC.	$	396.7	$	82.3	$	677.5	$	285.8

The accompanying notes to the consolidated financial statements are an integral part of these statements.

3

OMNICOM GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In millions, except per share amounts)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
COMMON STOCK:
Common Stock, shares issued	297.2		297.2		297.2		297.2
Common Stock, par value	$	44.6	$	44.6	$	44.6	$	44.6
ADDITIONAL PAID-IN CAPITAL:
Beginning Balance	580.7		584.5		571.1		622.0
Net change in noncontrolling interests	(41.4)		(4.7)		(79.9)		(10.3)
Change in temporary equity	32.8		(16.0)		54.1		(73.8)
Share-based compensation	20.4		20.1		41.1		40.1
Stock issued, share-based compensation	(6.7)		(16.9)		(0.6)		(11.0)
Ending Balance	585.8		567.0		585.8		567.0
RETAINED EARNINGS:
Beginning Balance	9,825.5		9,027.3		9,739.3		8,998.8
Net income	366.3		348.4		593.8		522.2
Common stock dividends declared	(140.4)		(145.0)		(281.7)		(290.3)
Ending Balance	10,051.4		9,230.7		10,051.4		9,230.7
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):
Beginning Balance	(1,384.5)		(1,222.6)		(1,437.9)		(1,252.3)
Other comprehensive income	30.3		(266.1)		83.7		(236.4)
Ending Balance	(1,354.2)		(1,488.7)		(1,354.2)		(1,488.7)
TREASURY STOCK:
Beginning Balance	(5,949.7)		(5,434.1)		(5,665.0)		(5,142.9)
Stock issued, share-based compensation	14.1		20.9		34.5		30.0
Common stock repurchased	(238.5)		(107.2)		(543.6)		(407.5)
Ending Balance	(6,174.1)		(5,520.4)		(6,174.1)		(5,520.4)
SHAREHOLDERS' EQUITY	3,153.5		2,833.2		3,153.5		2,833.2
NONCONTROLLING INTERESTS:
Beginning Balance	514.6		548.9		524.3		503.5
Net income	16.9		21.6		33.3		42.4
Other comprehensive income (loss)	(3.6)		(18.7)		(3.8)		(18.0)
Dividends to noncontrolling interests	(19.5)		(23.7)		(32.0)		(37.7)
Net change in noncontrolling interests	(2.5)		(5.5)		(15.9)		(15.4)
Increase in noncontrolling interests from business combinations	—		—		—		47.8
Ending Balance	505.9		522.6		505.9		522.6
TOTAL EQUITY	$	3,659.4	$	3,355.8	$	3,659.4	$	3,355.8
Dividends Declared Per Common Share	$	0.70	$	0.70	$	1.40	$	1.40

The accompanying notes to the consolidated financial statements are an integral part of these statements.

4

OMNICOM GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In millions)

	Six Months Ended June 30,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	627.1	$	564.6
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization of right-of-use assets	66.4		70.7
Amortization of intangible assets	38.6		40.2
Amortization of net deferred loss on interest rate swaps	2.7		2.7
Share-based compensation	41.1		40.1
Real estate and other repositioning costs	191.5		—
Gain on disposition of subsidiary	(78.8)		—
Non-cash charges related to the effects of the war in Ukraine	—		65.8
Other, net	(8.4)		(16.4)
Use of operating capital	(1,664.8)		(1,507.6)
Net Cash Used In Operating Activities	(784.6)		(739.9)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(40.0)		(42.5)
Acquisition of businesses and interests in affiliates, net of cash acquired	(6.1)		(263.8)
Proceeds from disposition of subsidiary and other	178.7		(86.5)
Net Cash Provided By (Used In) Investing Activities	132.6		(392.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in short-term debt	1.7		3.2
Dividends paid to common shareholders	(285.1)		(293.6)
Repurchases of common stock	(538.8)		(407.5)
Proceeds from stock plans	33.2		15.0
Acquisition of additional noncontrolling interests	(34.7)		(15.5)
Dividends paid to noncontrolling interest shareholders	(32.0)		(37.7)
Payment of contingent purchase price obligations	(14.3)		(9.6)
Other, net	(27.0)		(36.1)
Net Cash Used In Financing Activities	(897.0)		(781.8)
Effect of foreign exchange rate changes on cash and cash equivalents	1.3		(197.2)
Net Decrease in Cash and Cash Equivalents	(1,547.7)		(2,111.7)
Cash and Cash Equivalents at the Beginning of Period	4,281.8		5,316.8
Cash and Cash Equivalents at the End of Period	$	2,734.1	$	3,205.1

The accompanying notes to the consolidated financial statements are an integral part of these statements.

5

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

1. Presentation of Financial Statements

The terms “Omnicom,” “the Company,” “we,” “our” and “us” each refer to Omnicom Group Inc. and its subsidiaries, unless the context indicates otherwise. The accompanying unaudited consolidated financial statements were prepared in accordance with generally accepted accounting principles in the United States, or U.S. GAAP or GAAP, for interim financial information and Article 10 of Regulation S-X of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures have been condensed or omitted.

In our opinion, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation, in all material respects, of the information contained herein. These unaudited consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2022, or 2022 10-K. Results for the interim periods are not necessarily indicative of results that may be expected for the year.

Risks and Uncertainties

Current global economic challenges, including the impact of the war in Ukraine, high and persistent inflation, rising interest rates, supply chain disruptions, credit market deterioration, and other macroeconomic factors, could cause economic uncertainty and volatility. The impact of these issues on our business will vary by geographic market and discipline. We monitor economic

conditions closely, as well as client revenue levels and other factors. In response to reductions in revenue, we can take actions to align our cost structure with changes in client demand and manage our working capital. However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions, reductions in client

revenue, changes in client creditworthiness and other developments.

2. Revenue

Nature of our services

We provide an extensive range of advertising, marketing and corporate communications services through various client-centric networks that are organized to meet specific client objectives. Our networks, practice areas and agencies provide a comprehensive range of services in the following fundamental disciplines: Advertising & Media, Precision Marketing, Commerce & Brand Consulting, Experiential, Execution & Support, Public Relations and Healthcare. Advertising & Media includes creative services across digital and traditional media, strategic media planning and buying, performance media and data analytics services. Precision Marketing includes digital and direct marketing, digital transformation consulting and data and analytics. Commerce & Brand Consulting services include brand and product consulting, strategy and research, retail and ecommerce. Experiential marketing services include live and digital events and experience design and execution. Execution & Support includes field marketing, digital and physical merchandising, point-of-sale and product placement, as well as other specialized marketing and custom communications services. Public Relations services include corporate communications, crisis management, public affairs and media and media relations services. Healthcare includes corporate communications and advertising and media services to global healthcare and pharmaceutical companies. At the core of all our services is the ability to create or develop a client’s marketing or corporate communications message into content that can be delivered to a target audience across different communications mediums.

Economic factors affecting our revenue

Global economic conditions have a direct impact on our revenue. Adverse economic conditions pose a risk that our clients may reduce, postpone or cancel spending for our services, which would impact our revenue.

Revenue by discipline:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Advertising & Media	$	1,911.5	$	1,834.4	$	3,688.0	$	3,604.6
Precision Marketing	369.0		363.9		729.0		703.1
Commerce & Brand Consulting	210.5		207.0		420.1		418.4
Experiential	164.4		152.0		312.2		291.7
Execution & Support	211.6		272.2		467.1		549.2
Public Relations	393.6		394.0		769.1		756.4
Healthcare	349.3		343.7		667.7		654.1
Revenue	$	3,609.9	$	3,567.2	$	7,053.2	$	6,977.5

6

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

Effective January 1, 2023, we realigned the classification of certain services primarily within our Commerce & Brand Consulting, Execution & Support, and Experiential disciplines and prior year amounts have been reclassified.

Revenue by geographic market:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Americas:
North America	$	1,978.8	$	1,969.5	$	3,905.6	$	3,808.5
Latin America	84.6		79.9		158.6		147.6
EMEA:
Europe	1,045.6		1,024.9		1,997.5		2,016.9
Middle East and Africa	62.6		64.9		147.5		146.8
Asia-Pacific	438.3		428.0		844.0		857.7
Revenue	$	3,609.9	$	3,567.2	$	7,053.2	$	6,977.5

The Americas is comprised of North America, which includes the United States, Canada and Puerto Rico, and Latin America, which includes South America and Mexico. EMEA is comprised of Europe, the Middle East and Africa. Asia-Pacific includes Australia, Greater China, India, Japan, Korea, New Zealand, Singapore and other Asian countries. Revenue in the United States for the three months ended June 30, 2023, and 2022 was $1,850.6 million and $1,842.8 million, respectively, and revenue in the United States for six months ended June 30, 2023, and 2022 was $3,662.8 million and $3,567.4 million, respectively.

Contract assets and liabilities

Contract assets and contract liabilities:

	June 30, 2023		December 31, 2022		June 30, 2022
Media and production costs	$	797.1	$	725.1	$	588.5
Contract assets and unbilled fees and costs	840.9		529.5		647.4
Work in process	$	1,638.0	$	1,254.6	$	1,235.9
Contract liabilities:
Customer advances	$	1,159.7	$	1,492.3	$	1,372.8

Work in process represents accrued costs incurred on behalf of customers, including media and production costs, and fees and other third-party costs that have not yet been billed. Media and production costs are billed during the production process in accordance with the terms of the client contract. Contract assets primarily include incentive fees, which are not material and will be billed to clients in accordance with the terms of the client contract. Substantially all unbilled fees and costs will be billed within the next 30 days. There were no impairment losses to the contract assets recorded in the six months ended June 30, 2023 and 2022. Contract liabilities primarily represent advance billings to customers in accordance with the terms of the client contracts, principally for the reimbursement of third-party costs that are generally incurred in the near term.

3. Net Income per Share

The computations of basic and diluted net income per share:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net Income - Omnicom Group Inc.	$	366.3	$	348.4	$	593.8	$	522.2
Weighted Average Shares:
Basic	198.9		205.3		200.6		206.8
Dilutive stock options and restricted shares	2.7		1.6		2.5		1.5
Diluted	201.6		206.9		203.1		208.3
Anti-dilutive stock options and restricted shares	—		4.4		—		4.4
Net Income per Share - Omnicom Group Inc.:
Basic	$1.84		$1.70		$2.96		$2.53
Diluted	$1.82		$1.68		$2.92		$2.51

7

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

4. Goodwill and Intangible Assets

Change in goodwill:

	Six Months Ended June 30,
	2023		2022
January 1	$	9,734.3	$	9,738.6
Acquisitions	3.2		201.1
Noncontrolling interests in acquired businesses	—		47.9
Contingent purchase price obligations of acquired businesses	3.3		—
Dispositions	(118.6)		(19.6)
Foreign currency translation	81.2		(266.2)
June 30	$	9,703.4	$	9,701.8

There were no goodwill impairment losses recorded in the six months ended June 30, 2023 and 2022, and there are no accumulated goodwill impairment losses.

Intangible assets:

	June 30, 2023						December 31, 2022
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value		Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Purchased and internally    developed software	$	361.3	$	(297.5)	$	63.8	$	374.8	$	(309.1)	$	65.7
Customer related and other	750.8		(525.6)		225.2		758.5		(510.8)		247.7
Total Intangible Assets	$	1,112.1	$	(823.1)	$	289.0	$	1,133.3	$	(819.9)	$	313.4

We completed our annual goodwill impairment test as of May 1, 2023. The market assumptions used in our assessment reflected the current economic environment (see Note 1- Risks and Uncertainties). Based on the results of our impairment test, we concluded that at May 1, 2023 our goodwill was not impaired. To better align with our internal financial processes, in 2023, the date of our annual impairment test was changed from June 30 to May 1.

5. Debt

Credit Facilities

We have a $2.5 billion multi-currency revolving credit facility, or Credit Facility. In June 2023, the Credit Facility was amended to, among other things, extend the termination date of the Credit Facility to June 2, 2028 and transition the benchmark rate for U.S. Dollar denominated loans from LIBOR to the Secured Overnight Financing Rate, or SOFR. In addition, we have the ability to issue up to $2 billion of U.S. Dollar denominated commercial paper and issue up to the equivalent of $500 million in British Pounds or Euro under a Euro commercial paper program. During the second quarter of 2023, the maximum amount of commercial paper outstanding was $200 million, which was redeemed. Certain of our international subsidiaries have uncommitted credit lines that are guaranteed by Omnicom aggregating $585.5 million. These facilities provide additional liquidity sources for operating capital and general corporate purposes. At June 30, 2023, there were no outstanding borrowings under the Credit Facility, and no outstanding commercial paper.

The Credit Facility contains a financial covenant that requires us to maintain a Leverage Ratio of consolidated indebtedness to consolidated EBITDA (earnings before interest, taxes, depreciation, amortization and non-cash charges) of no more than 3.5 times for the most recently ended 12-month period. At June 30, 2023, we were in compliance with this covenant as our Leverage Ratio was 2.4 times. The Credit Facility does not limit our ability to declare or pay dividends or repurchase our common stock.

Short-Term Debt

Short-term debt of $20.5 million and $16.9 million at June 30, 2023 and December 31, 2022, respectively, represented bank overdrafts and short-term borrowings primarily of our international subsidiaries. Due to the short-term nature of this debt, carrying value approximates fair value.

8

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

Long-Term Debt

Long-term debt:

	June 30, 2023		December 31, 2022
3.65% Senior Notes due 2024	$	750.0	$	750.0
3.60% Senior Notes due 2026	1,400.0		1,400.0
€500 million 0.80% Senior Notes due 2027	543.3		534.9
2.45% Senior Notes due 2030	600.0		600.0
4.20% Senior Notes due 2030	600.0		600.0
€500 million 1.40% Senior Notes due 2031	543.3		534.9
2.60% Senior Notes due 2031	800.0		800.0
£325 million 2.25% Senior Notes due 2033	409.9		392.0
Long-Term Debt, Gross	5,646.5		5,611.8
Unamortized discount	(8.5)		(9.0)
Unamortized debt issuance costs	(24.4)		(26.2)
Unamortized deferred gain from settlement of interest rate swaps	0.1		0.6
Long-Term Debt	$	5,613.7	$	5,577.2

Our 2.45% Senior Notes due 2030, 4.20% Senior Notes due 2030 and 2.60% Senior Notes due 2031 are senior unsecured obligations of Omnicom that rank equal in right of payment with all existing and future unsecured senior indebtedness.

Omnicom and its wholly owned finance subsidiary, Omnicom Capital Inc., or OCI, are co-obligors under the 3.65% Senior Notes due 2024 and the 3.60% Senior Notes due 2026. These notes are a joint and several liability of Omnicom and OCI, and Omnicom unconditionally guarantees OCI’s obligations with respect to the notes. OCI provides funding for our operations by incurring debt and lending the proceeds to our operating subsidiaries. OCI’s assets primarily consist of cash and cash equivalents and intercompany loans made to our operating subsidiaries, and the related interest receivable. There are no restrictions on the ability of OCI or Omnicom to obtain funds from our subsidiaries through dividends, loans or advances. Such notes are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness.

Omnicom and OCI have, jointly and severally, fully and unconditionally guaranteed the obligations of Omnicom Finance Holdings plc, or OFH, a U.K.-based wholly owned subsidiary of Omnicom, with respect to the €500 million 0.80% Senior Notes due 2027 and the €500 million 1.40% Senior Notes due 2031, collectively the Euro Notes. OFH’s assets consist of its investments in several wholly owned finance companies that function as treasury centers, providing funding for various operating companies in Europe, Australia and other countries in the Asia-Pacific region. The finance companies’ assets consist of cash and cash equivalents and intercompany loans that they make or have made to the operating companies in their respective regions and the related interest receivable. There are no restrictions on the ability of Omnicom, OCI or OFH to obtain funds from their subsidiaries through dividends, loans or advances. The Euro Notes and the related guarantees are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness of OFH and each of Omnicom and OCI, respectively.

Omnicom has fully and unconditionally guaranteed the obligations of Omnicom Capital Holdings plc, or OCH, a U.K.-based wholly owned subsidiary of Omnicom, with respect to the £325 million 2.25% Senior Notes due 2033, or Sterling Notes. OCH’s assets consist of its investments in several wholly owned finance companies that function as treasury centers, providing funding for various operating companies in EMEA, Australia and other countries in the Asia-Pacific region. The finance companies’ assets consist of cash and cash equivalents and intercompany loans that they make or have made to the operating companies in their respective regions and the related interest receivable. There are no restrictions on the ability of Omnicom or OCH to obtain funds from their subsidiaries through dividends, loans or advances. The Sterling Notes and the related guarantee are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness of OCH and Omnicom, respectively.

6. Segment Reporting

Our branded agency networks operate in the advertising, marketing and corporate communications services industry, and are organized into agency networks, virtual client networks, regional reporting units and operating groups or practice areas. Our networks, virtual client networks and agencies increasingly share clients and provide clients with integrated services. The main economic components of each agency are employee compensation and related costs and direct service costs and occupancy and other costs, which include rent and occupancy costs, technology costs and other overhead expenses. Therefore, given these similarities, we aggregate our six operating segments, which are our agency networks, into one reporting segment.

9

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

The agency networks' regional reporting units comprise three regions: the Americas, EMEA and Asia-Pacific. The regional reporting units monitor the performance of and are responsible for the agencies in their region. Agencies within the regional reporting units serve similar clients in similar industries and, in many cases, the same clients, and have similar economic characteristics.

Revenue and long-lived assets and goodwill by geographic region:

	Americas		EMEA		Asia-Pacific
June 30, 2023
Revenue - Three months ended	$	2,063.4	$	1,108.2	$	438.3
Revenue - Six months ended	$	4,064.2	$	2,145.0	$	844.0
Long-lived assets and goodwill	$	7,521.9	$	3,431.1	$	706.5
June 30, 2022
Revenue - Three months ended	$	2,049.4	$	1,089.8	$	428.0
Revenue - Six months ended	$	3,956.1	$	2,163.7	$	857.7
Long-lived assets and goodwill	$	7,850.0	$	3,282.6	$	661.8

7. Income Taxes

Our effective tax rate for the six months ended June 30, 2023 decreased period-over-period to 26.4% from 30.6%. The six months ended June 30, 2023 includes an increase of $10.7 million in income tax expense related to a lower tax benefit in certain jurisdictions for the real estate and other repositioning costs and an increase in the U.K. statutory tax rate, partially offset by $10.0 million of previously unrecognized tax benefits. The higher effective tax rate for the six months ended June 30, 2022 was predominantly due to the non-deductibility of the $113.4 million charges recorded in the first quarter of 2022, arising from the effects of the war in Ukraine, as well as an additional increase in income tax expense of $4.8 million related to the disposition of our businesses in Russia.

On August 16, 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law. The IRA levies a 1% excise tax on net stock repurchases after December 31, 2022. The excise tax is recorded as part of the cost of acquiring treasury stock and is not material. Additionally, the IRA imposes a 15% corporate alternative minimum tax, or CAMT, for tax years beginning after December 31, 2022. The CAMT is not expected to have a material impact on our results of operations or financial position.

Various foreign jurisdictions are in the process of enacting legislation to adopt a minimum effective tax rate described in the Global Anti-Base Erosion, GloBE or Pillar Two, model rules issued by the Organization for Economic Cooperation and Development. A minimum effective tax rate of 15% would apply to multinational companies with consolidated revenue above €750 million. Currently, only South Korea and Japan have enacted legislation consistent with the GloBE rules. Other countries are expected to adopt GloBE rules in 2023 with effective dates beginning in 2024.

Under the GloBE rules, a company would be required to determine a combined effective tax rate for all entities located in a jurisdiction. If the jurisdictional effective tax rate is less than 15%, a top-up tax generally will be due to bring the jurisdictional effective tax rate up to 15%.

At June 30, 2023, our unrecognized tax benefits were $159.6 million. Of this amount, approximately $153.8 million would affect our effective tax rate upon resolution of the uncertain tax positions.

8. Pension and Other Postemployment Benefits

Net periodic benefit expense:

	Defined Benefit Pension Plans				Postemployment Arrangements
	Six Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Service cost	$	1.7	$	0.8	$	1.7	$	2.2
Interest cost	5.1		1.7		2.8		1.3
Expected return on plan assets	(0.5)		(0.3)		—		—
Amortization of prior service cost	0.2		0.2		1.9		1.9
Amortization of actuarial losses	0.4		1.7		—		1.3
Total net periodic benefit expense	$	6.9	$	4.1	$	6.4	$	6.7

We contributed $0.3 million to our defined benefit pension plans in both the six months ended June 30, 2023 and 2022.

10

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

9. Real Estate and Other Repositioning Costs

In connection with the transition to a flexible working environment, a hybrid model which allows for partial remote work, we took certain actions in the first quarter of 2023 to reduce and reposition our office lease portfolio. In the second quarter of 2023, as a result of our continuing efforts to increase efficiencies and relevant skill sets to meet client demands, we incurred severance charges and other exit costs associated with rebalancing our workforce and consolidating operations in certain markets.

For the three and six months ended June 30, 2023, operating expenses included $72.3 million ($54.5 million after tax), primarily related to severance actions in the second quarter of 2023 and $191.5 million ($145.5 million after tax), respectively, for non-cash impairment charges for the operating lease right-of-use, or ROU, assets, severance charges, and other exit costs. All severance and other costs will be paid in less than one year. Substantially all of the operating lease payments related to the ROU assets will be paid out over three years.

10. Disposition of Subsidiaries

In April 2023, we disposed of certain research businesses included in our Execution & Support discipline. As a result, we recorded a pretax gain of $78.8 million. The disposition will not have a material impact on our ongoing results of operations or financial position.

11. Charges Arising from the Effects of the War in Ukraine

In 2022, we disposed of our businesses in Russia. In the first quarter of 2022, we recorded pretax charges of $113.4 million, which included cash charges of $47.6 million and primarily consisted of the loss on the disposition of our net investment in our Russian businesses and included charges related to the suspension of operations in Ukraine. All of the charges related to the disposition of our businesses in Russia had been paid as of December 31, 2022, and substantially all of our commitments related to the suspension of operations in Ukraine have been paid as of March 31, 2023.

12. Supplemental Cash Flow Data

Change in operating capital:

	Six Months Ended June 30,
	2023		2022
(Increase) decrease in accounts receivable	$	584.6	$	950.5
(Increase) decrease in work in process and other current assets	(394.3)		(153.9)
Increase (decrease) in accounts payable	(1,016.1)		(1,856.3)
Increase (decrease) in customer advances, taxes payable and other current liabilities	(786.3)		(455.0)
Change in other assets and liabilities, net	(52.7)		7.1
Increase (decrease) in operating capital	$	(1,664.8)	$	(1,507.6)
Income taxes paid	$	289.1	$	272.6
Interest paid	$	75.2	$	76.8

Non-cash increase in lease liabilities:

Operating leases	$	77.4	$	151.8
Finance leases	$	25.6	$	35.7

13. Commitments and Contingent Liabilities

In the ordinary course of business, we are involved in various legal proceedings. We do not presently expect that these proceedings will have a material adverse effect on our results of operations or financial position.

11

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

14. Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss), net of income taxes:

	Cash Flow Hedge		Defined Benefit Pension Plans and Postemployment Arrangements		Foreign Currency Translation		Total
	Six Months Ended June 30, 2023
January 1	$	(12.1)	$	(41.3)	$	(1,384.5)	$	(1,437.9)
Other comprehensive income (loss) before reclassifications	—		—		80.0		80.0
Reclassification from accumulated other comprehensive    income (loss)	2.0		1.7		—		3.7
June 30	$	(10.1)	$	(39.6)	$	(1,304.5)	$	(1,354.2)

	Six Months Ended June 30, 2022
January 1	$	(16.1)	$	(90.4)	$	(1,145.8)	$	(1,252.3)
Other comprehensive income (loss) before reclassifications	—		—		(241.1)		(241.1)
Reclassification from accumulated other comprehensive    income (loss)	2.0		2.7		—		4.7
June 30	$	(14.1)	$	(87.7)	$	(1,386.9)	$	(1,488.7)

15. Fair Value

Financial assets and liabilities are recorded at fair value based on the following:

•Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities; unadjusted quoted prices for identical assets or liabilities in markets that are not active; and model-derived valuations with observable inputs.

•Level 3: Unobservable inputs for the asset or liability.

Financial assets and liabilities measured at fair value on a recurring basis:

	June 30, 2023								December 31, 2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	2,734.1					$	2,734.1	$	4,281.8					$	4,281.8
Short-term investments			$	75.9			75.9				$	60.7			60.7
Marketable equity securities	0.8						0.8		0.9						0.9
Liabilities:
Foreign currency derivatives			$	—			$	—			$	0.1			$	0.1
Cross currency swaps - net  investment hedge			6.4				6.4				16.5				16.5
Contingent purchase price obligations					$	158.0	158.0						$	115.0	115.0

Change in the Level 3 fair value measurement of contingent purchase price obligations:

	Six Months Ended June 30,
	2023		2022
January 1	$	115.0	$	167.1
Acquisitions	62.9		0.8
Revaluation and interest	(6.2)		0.8
Payments	(14.3)		(9.9)
Foreign currency translation	0.6		(4.3)
June 30	$	158.0	$	154.5

12

OMNICOM GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Amounts in tables in millions, except per share data or unless otherwise noted)

Carrying amount and fair value of our financial assets and liabilities:

	June 30, 2023				December 31, 2022
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Cash and cash equivalents	$	2,734.1	$	2,734.1	$	4,281.8	$	4,281.8
Short-term investments	75.9		75.9		60.7		60.7
Marketable equity securities	0.8		0.8		0.9		0.9
Non-marketable equity securities	6.8		6.8		5.6		5.6
Liabilities:
Short-term debt	$	20.5	$	20.5	$	16.9	$	16.9
Foreign currency derivatives	—		—		0.1		0.1
Cross currency swaps - net investment hedge	6.4		6.4		16.5		16.5
Contingent purchase price obligations	158.0		158.0		115.0		115.0
Long-term debt	5,613.7		5,029.2		5,577.2		4,993.4

The estimated fair values of the cross-currency swaps and foreign currency derivative instruments are determined using model-derived valuations, taking into consideration foreign currency rates, interest rates, and counterparty credit risk. The estimated fair value of the contingent purchase price obligations is calculated in accordance with the terms of each acquisition agreement and is discounted. The fair value of long-term debt is based on quoted market prices.

16. Subsequent Events

We have evaluated events subsequent to the balance sheet date and determined that there have not been any events that have occurred that would require additional adjustments to or disclosures in these consolidated financial statements.

13

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING STATEMENTS

Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements, including statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, from time to time, the Company or its representatives have made, or may make, forward-looking statements, orally or in writing. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial position, or otherwise, based on current beliefs of the Company’s management as well as assumptions made by, and information currently available to, the Company’s management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “should,” “would,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or similar words, phrases or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include:

•adverse economic conditions, including those caused by the war in Ukraine, the lingering effects of COVID-19, high and

persistent inflation in countries that comprise our major markets, rising interest rates, and supply chain issues affecting the

distribution of our clients’ products;

•international, national or local economic conditions that could adversely affect the Company or its clients;

•losses on media purchases and production costs incurred on behalf of clients;

•reductions in client spending, a slowdown in client payments and a deterioration or a disruption in the credit markets;

•the ability to attract new clients and retain existing clients in the manner anticipated;

•changes in client advertising, marketing and corporate communications requirements;

•failure to manage potential conflicts of interest between or among clients;

•unanticipated changes related to competitive factors in the advertising, marketing and corporate communications

industries;

•the ability to hire and retain key personnel;

•currency exchange rate fluctuations;

•reliance on information technology systems;

•changes in legislation or governmental regulations affecting the Company or its clients;

•risks associated with assumptions the Company makes in connection with its critical accounting estimates and legal     

proceedings;

•the Company’s international operations, which are subject to the risks of currency repatriation restrictions, social or

political conditions and regulatory environment;

•effectively managing the risks, challenges and efficiencies presented by utilizing Artificial Intelligence (AI) technologies and partnerships in our business; and

•risks related to our environmental, social and governance goals and initiatives, including impacts from regulators and

other stakeholders, and the impact of factors outside of our control on such goals and initiatives.

The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that may affect the Company’s business, including those described in Item 1A, “Risk Factors” and Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022, or 2022 10-K, and in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this report. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements.

EXECUTIVE SUMMARY

The unaudited consolidated financial statements and related notes to the unaudited consolidated financial statements, including our critical accounting estimates, and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this report, should be read in conjunction with our 2022 10-K. The amounts shown in the following tables are in millions, except share and per share data or unless otherwise noted.

Given our size and breadth, we manage our business by monitoring several financial indicators. The key performance indicators we focus on are revenue growth, operating income, and EBITA (defined as earnings before interest, taxes and amortization of intangible assets) and EBITA margin (defined as EBITA divided by revenue). We analyze revenue growth by reviewing the components and mix of the growth, including growth by regional market, practice area and marketing discipline, the impact from foreign currency exchange rate changes, growth from acquisitions, net of dispositions, and growth from our largest clients. Variability in operating expenses is analyzed in the following categories: cost of services, selling, general and administrative expenses, or SG&A, and depreciation and amortization.

Financial Performance

Revenue for the three months ended June 30, 2023 increased to $3,609.9 million, compared to $3,567.2 million in the prior year quarter. Organic revenue growth (defined below) increased $121.4 million, or 3.4%, primarily reflecting increased client

14

spending in most of our disciplines and all of our major geographic markets compared to the prior year period. Changes in foreign exchange rates reduced revenue $24.4 million, or 0.7%, primarily due to the weakening of the Australian Dollar, Canadian Dollar, and Renminbi against the U.S. Dollar, which was partially offset by the strengthening of the Euro against the U.S. Dollar. Acquisition revenue, net of disposition revenue, reduced revenue $54.3 million, or 1.5%. The reduction from acquisition revenue, net of disposition revenue, primarily reflects dispositions in the Execution & Support discipline in the first and second quarters of 2023.

Revenue for the six months ended June 30, 2023 increased slightly to $7,053.2 million, compared to $6,977.5 million in the prior year period. Organic revenue growth increased $300.1 million, or 4.3%, primarily reflecting increased client spending in most of our disciplines and across all of our major geographic markets compared to the prior year period. Changes in foreign exchange rates reduced revenue $134.4 million, or 1.9%, primarily due to the weakening of the British Pound, Australian Dollar, Canadian Dollar, Euro, and Yen against the U.S. Dollar, and acquisition revenue, net of disposition revenue, reduced revenue $90.0 million, or 1.3%. The reduction in acquisition revenue, net of disposition revenue, primarily reflects dispositions in the Execution & Support discipline in the first and second quarters of 2023 and the disposition of our businesses in Russia in the first quarter of 2022, partially offset by acquisitions in the Precision Marketing discipline in the first quarter of 2022.

The change in revenue period-over-period for the three months ended June 30, 2023 was: Advertising & Media increased $77.1 million, Precision Marketing increased $5.1 million, Commerce & Brand Consulting increased $3.5 million, Experiential increased $12.4 million, Execution & Support decreased $60.6 million, Public Relations decreased $0.4 million and Healthcare increased $5.6 million.

The change in revenue period-over-period for the six months ended June 30, 2023 was: Advertising & Media increased $83.4 million, Precision Marketing increased $25.9 million, Commerce & Brand Consulting increased $1.7 million, Experiential increased $20.5 million, Execution & Support decreased $82.1 million, Public Relations increased $12.7 million and Healthcare increased $13.6 million.

The change in revenue period-over-period across our geographic markets for the three months ended June 30, 2023 was: North America increased $9.3 million, or 0.5%, Latin America increased $4.7 million, or 5.9%, Europe increased $20.7 million, or 2.0%, the Middle East and Africa decreased $2.3 million, or 3.5%, and Asia-Pacific increased $10.3 million, or 2.4%.

The change in revenue period-over-period across our geographic markets for the six months ended June 30, 2023 was: North America increased $97.1 million, or 2.5%, Latin America increased $11.0 million, or 7.5%, Europe decreased $19.4 million, or 1.0%, the Middle East and Africa increased $0.7 million, or 0.5%, and Asia-Pacific decreased $13.7 million, or 1.6%.

A summary of our consolidated results of operations period-over-period is:

	Three Months Ended June 30,										Six Months Ended June 30,
	2023			2022			$ Change		% Change		2023			2022			$ Change		% Change
Revenue	$	3,609.9		$	3,567.2		$	42.7	1.2	%	$	7,053.2		$	6,977.5		$	75.7	1.1	%
Operating Income2,3	$	550.7		$	541.6		$	9.1	1.7	%	$	897.2		$	894.6		$	2.6	0.3	%
Operating Margin2,3	15.3		%	15.2		%			0.1	%	12.7		%	12.8		%			(0.1)	%
Interest expense, net	$	27.4		$	40.1		$	(12.7)	(31.7)	%	$	46.7		$	82.9		$	(36.2)	(43.7)	%
Net Income - Omnicom Group Inc.2,3	$	366.3		$	348.4		$	17.9	5.1	%	$	593.8		$	522.2		$	71.6	13.7	%
Net Income per Share - Omnicom Group Inc.: Diluted2,3	$	1.82		$	1.68		$	0.14	8.3	%	$	2.92		$	2.51		$	0.41	16.3	%
EBITA1,2,3	$	570.0		$	562.4		$	7.6	1.4	%	$	935.8		$	934.8		$	1.0	0.1	%
EBITA Margin1,2,3	15.8		%	15.8		%			—	%	13.3		%	13.4		%			(0.1)	%

1) See Non-GAAP reconciliation for the calculation of EBITA on page 25.

2) For the six months ended June 30, 2023, operating expenses included real estate operating lease impairment charges, severance, and other exit costs related to repositioning actions we took to reduce our real estate requirements, rebalance our workforce, and consolidate operations in certain markets. In the second quarter of 2023, we recorded a gain on disposition of our research businesses in the Execution & Support discipline and incurred repositioning costs, primarily related to severance payments. The impact to Operating Income for the three and six months ended June 30, 2023, was an increase of $6.5 million ($1.4 million after tax) and a reduction of $112.7 million ($89.6 million after tax), respectively. The net aggregate effect of these items in the three and six months ended June 30, 2023 to diluted net income per share - Omnicom Group Inc. was an increase of $0.01 and a decrease of $0.44, respectively (see Notes 9 and 10 to the unaudited consolidated financial statements).

3) For the six months ended June 30, 2022, operating expenses included $113.4 million charges recorded in the first quarter of 2022 as well as an additional net income tax charge of $4.8 million related to the disposition of our businesses in Russia, which reduced net income - Omnicom Group Inc. by $118.2 million and diluted net income per share - Omnicom Group Inc. by $0.56 (see Note 11 to the unaudited consolidated financial statements).

15

Our Business

Omnicom is a strategic holding company providing advertising, marketing, and corporate communications services to many of the largest global companies. Our portfolio of companies includes our global networks, BBDO, DDB, TBWA, Omnicom Media

Group, the DAS Group of Companies, and the Communications Consultancy Network. All of our global networks integrate their service offerings with the Omnicom branded practice areas, including the Omnicom Health Group, the Omnicom Precision Marketing Group, the Omnicom Commerce Group, the Omnicom Advertising Collective, the Omnicom Public Relations Group, and the Omnicom Brand Consulting Group, as well as our Experiential businesses and Execution & Support businesses, which includes the Omnicom Specialty Marketing Group.

On a global, pan-regional, and local basis, our networks, practice areas, and agencies provide a comprehensive range of services in the following fundamental disciplines: Advertising & Media, Precision Marketing, Commerce & Brand Consulting, Experiential, Execution & Support, Public Relations, and Healthcare. Advertising & Media includes creative services across digital and traditional media, strategic media planning and buying, performance media, and data analytics services. Precision Marketing includes digital and direct marketing, digital transformation consulting and data and analytics. Commerce & Brand Consulting services include brand and product consulting, strategy and research, retail, and ecommerce. Experiential marketing services include live and digital events and experience design and execution. Execution & Support includes field marketing, digital and physical merchandising, point-of-sale, product placement, as well as other specialized marketing and custom communications services. Public Relations services include corporate communications, crisis management, public affairs, and media and media relations services. Healthcare includes corporate communications and advertising and media services to global healthcare and pharmaceutical companies. Our geographic markets include the Americas, which includes North America and Latin America, Europe, the Middle East and Africa (EMEA), and Asia-Pacific.

Our business model was built and continues to evolve around our clients. While our networks, practice areas, and agencies operate under different names and frame their ideas in different disciplines, we organize our services around our clients. Our fundamental business principle is that our clients’ specific marketing requirements are the central focus of how we structure our service offerings and allocate our resources. This client-centric business model requires multiple agencies within Omnicom to collaborate in formal and informal virtual client networks utilizing our key client matrix organization structure. This collaboration allows us to cut across our internal organizational structures to execute our clients’ marketing requirements consistently and comprehensively. We use our client-centric approach to grow our business by expanding our service offerings to existing clients, moving into new markets, and obtaining new clients. In addition, we pursue selective acquisitions of complementary companies with strong entrepreneurial management teams that currently serve or could serve our existing clients. In addition to collaborating through our client service models, our agencies and networks collaborate across internally developed technology platforms. Annalect and Omni, our proprietary data and analytics platforms, are the strategic resource for all our agencies and networks to share when developing client service strategies across our virtual networks. These platforms provide precision marketing and insights at scale across creative, media, and other disciplines.

We believe generative AI will have a significant effect on how we provide services to our clients and how we enhance the productivity of our people. As with any new technology, we are working closely with our clients and technology partners to take advantage of the benefits while being mindful of its limitations and risks, and privacy concerns. We are committed to responsible AI practices and collaboration to harness AI's potential while evaluating related challenges, such as ethical considerations, intellectual property protection, regulatory compliance, and data security. While risks related to AI include these challenges and evolving regulations, public perception, and our ability to effectively adopt this new emerging technology, the rapidly developing nature of this technology makes it difficult to assess the impact in full at this time.

As a leading global advertising, marketing and corporate communications company, we operate in all major markets and have a large and diverse client base. For the twelve months ended June 30, 2023, our largest client accounted for 2.8% of our revenue and our 100 largest clients, which represent many of the world's major marketers, accounted for approximately 53.6% of our revenue. Our clients operate in virtually every sector of the global economy with no one industry representing more than 17% of our revenue for the six months ended June 30, 2023. Although our revenue is generally balanced between the United States and international markets, and we have a large and diverse client base, we are not immune to general economic downturns.

Risks and Uncertainties

Current global economic challenges, including the impact of the war in Ukraine, high and persistent inflation, rising interest rates, supply chain disruptions, credit market deterioration, and other macroeconomic factors, could cause economic uncertainty and volatility. The impact of these issues on our business will vary by geographic market and discipline. We closely monitor economic conditions, client revenue levels and other factors. In response to reductions in revenue, we can take actions to align our cost structure with changes in client demand and manage our working capital. However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions, reductions in client revenue, changes in client creditworthiness, and other developments. Revenue is typically lower in the first and third quarters and higher in the second and fourth quarters, reflecting client spending patterns during the year and additional project work that usually occurs in the fourth quarter. Certain global events targeted by major marketers for advertising expenditures, such as the FIFA

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World Cup and the Olympics, and certain national events, such as the U.S. election process, may affect our revenue period-over-period in certain businesses. Typically, these events do not have a significant impact on our revenue in any period.

CONSOLIDATED RESULTS OF OPERATIONS

The change in results of operations period-over-period were:

	Three Months Ended June 30,								Six Months Ended June 30,
	2023			2022			$ Change		2023			2022			$ Change
Revenue	$	3,609.9		$	3,567.2		$	42.7	$	7,053.2		$	6,977.5		$	75.7
Operating Expenses:
Salary and service costs	2,617.8			2,566.0			51.8		5,160.7			5,057.8			102.9
Occupancy and other costs	297.7			293.0			4.7		589.3			593.2			(3.9)
Real estate and other repositioning costs1,2	72.3			—			72.3		191.5			—			191.5
Charges arising from the effects of the war in Ukraine2	—			—			—		—			113.4			(113.4)
Gain on disposition of subsidiary	(78.8)			—			(78.8)		(78.8)			—			(78.8)
Cost of services	2,909.0			2,859.0			50.0		5,862.7			5,764.4			98.3
Selling, general and administrative expenses	99.1			110.9			(11.8)		188.3			207.6			(19.3)
Depreciation and amortization	51.1			55.7			(4.6)		105.0			110.9			(5.9)
Total operating expenses	3,059.2			3,025.6			33.6		6,156.0			6,082.9			73.1
Operating Income	550.7			541.6			9.1		897.2			894.6			2.6
Interest Expense	57.5			51.2			6.3		112.4			102.2			10.2
Interest Income	30.1			11.1			19.0		65.7			19.3			46.4
Income Before Income Taxes and Income From Equity Method Investments	523.3			501.5			21.8		850.5			811.7			38.8
Income Tax Expense	141.2			133.1			8.1		224.6			248.6			(24.0)
Income From Equity Method Investments	1.1			1.6			(0.5)		1.2			1.5			(0.3)
Net Income	383.2			370.0			13.2		627.1			564.6			62.5
Net Income Attributed To Noncontrolling Interests	16.9			21.6			(4.7)		33.3			42.4			(9.1)
Net Income - Omnicom Group Inc.1,2	$	366.3		$	348.4		$	17.9	$	593.8		$	522.2		$	71.6
Net Income Per Share - Omnicom Group Inc.:
Basic	$	1.84		$	1.70		$	0.14	$	2.96		$	2.53		$	0.43
Diluted1,2	$	1.82		$	1.68		$	0.14	$	2.92		$	2.51		$	0.41
Revenue	$	3,609.9		$	3,567.2		$	42.7	$	7,053.2		$	6,977.5		$	75.7
Operating Margin %	15.3		%	15.2		%			12.7		%	12.8		%
EBITA	$	570.0		$	562.4		$	7.6	$	935.8		$	934.8		$	1.0
EBITA Margin %	15.8		%	15.8		%			13.3		%	13.4		%

1) For the six months ended June 30, 2023, operating expenses included real estate operating lease impairment charges, severance, and other exit costs related to repositioning actions we took to reduce our real estate requirements, rebalance our workforce, and consolidate operations in certain markets. In the second quarter of 2023, we recorded a gain on the disposition of our research businesses in the Execution & Support discipline and incurred repositioning costs, primarily related to severance payments. The impact to Operating Income for the three and six months ended June 30, 2023, was an increase of $6.5 million ($1.4 million after tax) and a reduction of $112.7 million ($89.6 million after tax), respectively. The net aggregate effect of these items in the three and six months ended June 30, 2023 to diluted net income per share - Omnicom Group Inc. was an increase of $0.01 and a decrease of $0.44, respectively (see Notes 9 and 10 to the unaudited consolidated financial statements).

2) For the six months ended June 30, 2022, operating expenses included $113.4 million charges recorded in the first quarter of 2022 as well as an additional net income tax charge of $4.8 million related to the disposition of our businesses in Russia, which reduced net income - Omnicom Group Inc. by $118.2 million and diluted net income per share - Omnicom Group Inc. by $0.56 (see Note 11 to the unaudited consolidated financial statements).

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Revenue

The components of revenue change period-over-period in the United States (“Domestic”) and the remainder of the world (“International”) were:

	Total				Domestic				International
	$		%		$		%		$		%
Three months ended June 30, 2022	$	3,567.2			$	1,842.8			$	1,724.4
Components of revenue change:
Foreign exchange rate impact	(24.4)		(0.7)	%	—		—	%	(24.4)		(1.4)	%
Acquisition revenue, net of disposition revenue	(54.3)		(1.5)	%	(36.2)		(2.0)	%	(18.1)		(1.0)	%
Organic growth	121.4		3.4	%	44.0		2.4	%	77.4		4.5	%
Three months ended June 30, 2023	$	3,609.9	1.2	%	$	1,850.6	0.4	%	$	1,759.3	2.0	%

	Total				Domestic				International
	$		%		$		%		$		%
Six months ended June 30, 2022	$	6,977.5			$	3,567.4			$	3,410.1
Components of revenue change:
Foreign exchange rate impact	(134.4)		(1.9)	%	—		—	%	(134.4)		(3.9)	%
Acquisition revenue, net of disposition revenue	(90.0)		(1.3)	%	(35.9)		(1.0)	%	(54.1)		(1.6)	%
Organic growth	300.1		4.3	%	131.3		3.7	%	168.8		5.0	%
Six months ended June 30, 2023	$	7,053.2	1.1	%	$	3,662.8	2.7	%	$	3,390.4	(0.6)	%

The components and percentages are calculated as follows:

•Foreign exchange rate impact is calculated by translating the current period’s local currency revenue using the prior period average exchange rates to derive current period constant currency revenue (in this case $3,634.3 million and $7,187.6 million for the Total column for the three and six months ended June 30, 2023, respectively). The foreign exchange impact is the difference between the current period revenue in U.S. Dollars and the current period constant currency revenue ($3,609.9 million less $3,634.3 million and $7,053.2 million less $7,187.6 million for the Total column for the three and six months ended June 30, 2023, respectively).

•Acquisition revenue is calculated as if the acquisition occurred twelve months prior to the acquisition date by aggregating the comparable prior period revenue of acquisitions through the acquisition date. As a result, acquisition revenue excludes the positive or negative difference between our current period revenue subsequent to the acquisition date and the comparable prior period revenue and the positive or negative growth after the acquisition is attributed to organic growth. Disposition revenue is calculated as if the disposition occurred twelve months prior to the disposition date by aggregating the comparable prior period revenue of dispositions through the disposition date. The acquisition revenue and disposition revenue amounts are netted in the table.

•Organic growth is calculated by subtracting the foreign exchange rate impact, and the acquisition revenue, net of disposition revenue components from total revenue growth.

•The percentage change is calculated by dividing the individual component amount by the prior period revenue base of that component ($3,567.2 million and $6,977.5 million for the Total column for the three and six months ended June 30, 2023, respectively).

Changes in the value of foreign currencies against the U.S. Dollar affect our results of operations and financial position. For the most part, because the revenue and expense of our foreign operations are both denominated in the same local currency, the economic impact on operating margin is minimized. Assuming exchange rates at July 14, 2023 remain unchanged, we expect the impact of changes in foreign exchange rates to increase revenue in the third quarter by approximately 1.5% and to be flat for the year. Based on our acquisition and disposition activity to date, we expect that the net impact will reduce revenue by 1.5% for the third quarter of 2023 and 1.5% for the full year.

Revenue by Discipline

To monitor the changing needs of our clients and to further expand the scope of our services to key clients, we monitor revenue across a broad range of disciplines and group them into the following categories: Advertising & Media, Precision Marketing, Commerce & Brand Consulting, Experiential, Execution & Support, Public Relations, and Healthcare.

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The change in revenue period-over-period and organic growth by discipline was:

	Three Months Ended June 30,
	2023				2022				2023 vs. 2022
	$		% of Revenue		$		% of Revenue		$ Change		% Organic Growth
Advertising & Media	$	1,911.5	53.0	%	$	1,834.4	51.4	%	$	77.1	5.1	%
Precision Marketing	369.0		10.2	%	363.9		10.3	%	5.1		2.3	%
Commerce & Brand Consulting	210.5		5.8	%	207.0		5.8	%	3.5		2.4	%
Experiential	164.4		4.6	%	152.0		4.3	%	12.4		9.2	%
Execution & Support	211.6		5.9	%	272.2		7.6	%	(60.6)		(3.8)	%
Public Relations	393.6		10.9	%	394.0		11.0	%	(0.4)		0.1	%
Healthcare	349.3		9.6	%	343.7		9.6	%	5.6		3.0	%
Revenue	$	3,609.9			$	3,567.2			$	42.7	3.4	%

	Six Months Ended June 30,
	2023				2022				2023 vs. 2022
	$		% of Revenue		$		% of Revenue		$ Change		% Organic Growth
Advertising & Media	$	3,688.0	52.3	%	$	3,604.6	51.6	%	$	83.4	5.1	%
Precision Marketing	729.0		10.3	%	703.1		10.2	%	25.9		4.6	%
Commerce & Brand Consulting	420.1		6.0	%	418.4		6.0	%	1.7		2.8	%
Experiential	312.2		4.4	%	291.7		4.2	%	20.5		8.8	%
Execution & Support	467.1		6.6	%	549.2		7.8	%	(82.1)		(0.1)	%
Public Relations	769.1		10.9	%	756.4		10.8	%	12.7		2.9	%
Healthcare	667.7		9.5	%	654.1		9.4	%	13.6		3.8	%
Revenue	$	7,053.2			$	6,977.5