Omnicom Cautious Despite Q3 Profits Rise

30 October 2002

Omnicom Group on Tuesday posted a rise in third-quarter profits, but, in a sign of continued uncertainty over the ad outlook, refused to give a forecast for 2003.

The agency giant’s net profits jumped 11% to $126 million (€128m; £81m), in line with expectations. Revenues surged 13% to $1.76 billion, while organic revenue growth (excluding acquisitions/divestments) stood at 4.7% – gains largely driven by Omnicom’s performance in the US, where its sales leapt 19%.

However, the group failed to pull in as many new accounts in the quarter as it had hoped, winning net new business worth $876m, against a target of $1bn.

Omnicom assured investors it had enough cash to meet its business requirements, holding around $400m at the end of the quarter plus available credit of $1.5bn. Its debts total $2.63bn.

Looking forward, the ad giant expressed caution, though it is confident it will hit Q4 targets. The group revealed its public relations units are still struggling, and added that the recent rise in ad prices at US television networks should not necessarily be considered a trend.

Data sourced from: Financial Times; additional content by WARC staff