Omnicom posts net income of $398.1m in Q4 2020 against $415.0m in Q4 2019

The Omnicom Group Inc. has announced its financials for Q4, posting a net income of 398.1 million compared to $415.0 million in the fourth quarter of 2019. Diluted net income per share for the fourth quarter of 2020 was $1.84 per share compared to diluted net income per share of $1.89 for the fourth quarter of 2019.

Due to the COVID effect, Omnicom’s worldwide revenue in the fourth quarter of 2020 decreased by 9.3% to $3,757.0 million from $4,141.2 million in the fourth quarter of 2019.

Organic growth in the fourth quarter of 2020 as compared to the fourth quarter of 2019 in its five fundamental disciplines was as follows: Advertising decreased 9.7%, CRM Consumer Experience decreased 15.8%, CRM Execution & Support decreased 13.7%,  Public Relations increased 0.2% and Healthcare decreased 2.0%.

In all its regional markets, organic growth was negative in the fourth quarter of 2020 as compared to the fourth quarter of 2019.

Omnicom's operating profit decreased by $31.7 million, or 4.9%, to $614.7 million compared to $646.4 million during the fourth quarter of 2019.  Its operating margin for the fourth quarter of 2020 increased to 16.4% versus 15.6% for the fourth quarter of 2019.

Operating profit for the fourth quarter of 2020 includes a net decrease aggregating $11.1 million due to asset impairment charges recognized in the period, partially offset by a decrease in operating expenses related to reimbursements and tax credits under government programs in several countries where it has operations, including the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) in the U.S., the Kurzarbeit program in Germany, and other programs in the U.K., France, Canada and other jurisdictions.

For the fourth quarter of 2020, its effective income tax rate decreased period-over-period to 25.0% from 26.1%.

Company CEO John Wren, in the earnings call, said that despite their optimism, there are “still significant challenges in 2021."