Run a car company in the U.S., Europe, Japan or Korea? Chances are good Omnicom Group isn’t very pleased with you right now. According to the agency’s most recent financials (and accompanying teleconference), these four regions, and that one industry, accounted for its largest billings declines.
On the other hand, emerging markets such as the Middle East, China, India and Brazil posted stronger revenue performances. And while the food and beverage, pharmaceutical, health care, travel, technology and telecommunications industries cut their spending, these cuts didn’t approach the level done by the automotive firms.
To be sure, Omnicom was still profitable during first quarter 2009, as it generated $164.5 million in net income – roughly 6.5% of its $2.75 billion revenue. But both of those numbers were a far cry from first quarter 2008’s figures, when the agency pulled in just under $3.2 billion and realized net income of $208.7 million, or 7.3% of its revenue.
According to a transcript of an earnings call, Omnicom’s CRM operations were among the strongest within its marketing services revenue. This category’s revenue slipped only 13%, compared with a 17.4% drop for public relations and 20.1% plunge for specialty communications, which encompasses specialty media (directory or Yellow Pages), recruitment advertising, and the healthcare businesses.
Recruitment advertising was down almost 40% in the quarter, and the healthcare sector was down pretty much in line with the overall market, company CFO Randall J. Weisenburger said during the call.
Asked whether trends within the automotive industry, especially among international clients, were still deteriorating, Weisenburger responded “The rate of decline has stopped accelerating. I say that jokingly because that doesn’t say very much.”
But John Wren, the company’s president and CEO, was a bit more optimistic. He expressed confidence in his company’s Detroit team, even if major client Chrysler goes into reorganization.
Network
