Good morning, ladies and gentleman and welcome to the Omnicom First Quarter 2021 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded.

At this time, I'd like to introduce you to your host for today's conference, Chief Communications Officer, Joanne Trout. Please go ahead..

Good morning. Thank you for taking the time to listen to our First Quarter 2021 Earnings Call. On the call with me today is John Wren, our Chairman and Chief Executive Officer and Phil Angelastro, our Chief Financial Officer. We hope everyone has had a chance to review our earnings release.

We have posted to www.omnicomgroup.com this morning's press release, along with a presentation covering the information that we will review this morning. This call is also being simulcast and will be archived on our website.

Before we start, I've been asked to remind everyone to read the forward-looking statements and other information that we have included at the end of our investor presentation and to point out that certain of the statements made today may constitute forward-looking statements and that these statements are present expectations and that actual events or results may differ materially.

I would also like to remind you that during the course of the call, we will discuss some non-GAAP measures in talking about Omnicom's performance. You can find a reconciliation of those measures to the nearest comparable GAAP measures in the presentation materials.

We are going to begin this morning's call with an overview of our business from John Wren, then Phil Angelastro will review our financial results for the quarter. And then we will open the line for your questions..

Thank you, Joanne. Good morning. I hope everyone on the call is staying safe and healthy. I'm pleased to update you on how we continue to respond to and overcome the challenges of the pandemic. I'll first discuss our financial results.

Then we'll cover our performance with respect to our strategic priorities and operations and will end with our expectations for the remainder of 2021. For the first quarter, organic growth was negative 1.8%, which positions us for a very strong recovery for 2021. Going forward, we expect to see positive organic growth.

Before I go into our results in more detail, as you have seen in our investor presentation slides, we have provided a further breakdown of our CRM discipline. The new disciplines we have disclosed are as follows.

CRM Precision Marketing which includes our market consulting, digital and direct marketing agencies; CRM Commerce and Branding Consultancy includes our branding consultancies, shopper marketing and specialty production agencies.

CRM Experiential includes our event agencies and CRM Execution and Support is unchanged for the most part from our prior reporting and includes primarily our field marketing, research agencies and our agency servicing the not-for-profit sector.

We believe this additional level of disclosure will allow you to have a better understanding of our operations. Getting back to organic growth geography, in the United States, organic growth was down 1%, an improvement of over 8% from the fourth quarter.

Advertising and Media and CRM Precision Marketing were positive in the US, while the rest of our disciplines continue to be negative, with CRM Experiential having the largest negative impact on our growth.

Europe continued to face significant challenges due to the pandemic in Q1, although overall the markets continue to improve while the rollout of the vaccine in Europe like that of the United States in the UK, some countries like Germany and the Netherlands are starting to make progress.

The UK was down 6.4%, about half of the decline in the fourth quarter. CRM Precision Marketing, CRM Commerce Branding consultancy and health were all positive in the UK, primarily offset by a significant reduction in CRM Execution & Support due to our field marketing operations.

The Euro and the non-Euro markets were down 3.2% as compared to a negative 9.2% in Q4. Multiple countries at positive growth in the quarter and the majority continue to improve sequentially. Asia turned positive in Q1 with organic growth of 2.5%.

Australia continued to perform well and we saw a significant return to growth in our events business in China which combined with improvements in the other operations in the market resulted in double-digit growth. Latin America experienced negative 2.4% growth in Q1 and meaningful sequential improvement compared to the fourth quarter.

EBIT margin in the first quarter was 13.6% as compared to 12.3% in the first quarter of 2020. EBIT improved due to the repositioning and cost management actions we took in 2020. In 2021, our management teams are continuing to align costs with revenues and we're also seeing continued benefits from reductions in addressable spend.

While we expect addressable spend will not return to pre-COVID levels, travel and certain other addressable costs will likely increase during the course of 2021 as conditions improve.

Overall, our expectation is that operating margins for the full year of 2021 will exceed our 2020 operating margin, excluding repositioning costs incurred in Q2 of 2020. Net income for the quarter was $287.8 million an improvement of 11.5% from 2020 and EPS was $1.33 per share, a year-over-year increase of 11.8%.

Turning to our liquidity, the refinancing steps we took earlier in 2020 combined with our enhanced working capital processes and the curtailment of our share repurchase program have positioned us extremely well. We generated $383 million in free cash flow in the quarter and ended with $4.9 billion in cash.

Given the continuing improvements in our operations, strong liquidity and credit profile, our Board has approved the resumption of our share repurchases beginning in the second quarter. This follows our recent decision to increase our dividend by 7.7% to $0.70 per share.

Both actions are a testament to the steady improvement in our results and our expectations for further improvement for the remainder of 2021. Our traditional uses of our free cash flow paying dividends, pursuing accretive acquisitions and using our remaining cash for share repurchases is now fully back in effect.

Phil will cover our first quarter performance in more detail during his remarks. Turning now to our strategy and operations. In the midst of the pandemic, our key strategic objectives served us well.

These strategies are centered around hiring and retaining the best talent, driving organic growth by evolving our service offerings, improving operational efficiencies and investing in areas of growth. As part of this process, we continue to make internal investments in our agencies across all practice areas during a very difficult year.

We made good progress on enhancing our capabilities throughout our portfolio and we continue to pursue investments with a specific focus in Precision Marketing, mar-tech and digital transformation, Commerce, Media and Healthcare. We are also accelerating our pursuit of acquisitions in these areas and we've recently completed two transactions.

Omnicom Health Group acquired US based Archbow Consulting. Archbow helps pharmaceutical and biotech companies design, build and optimize market access operations, product distribution and patient access helps.

These capabilities will deepen Omnicom's health groups' consultative services to biotech and pharma companies across a broad spectrum from operations to marketing. Also in the quarter Credera, our mar-tech and digital transformation consulting business and part of Omnicom's Precision Marketing Group acquired RTM.

RTM will extend Credera's depth in digital transformation, digital marketing and e-commerce. The company specializes in the design delivery and implementation of real-time interaction and digital customer relationship management for some of the world's largest brands. It expands our operations in Australia, India, New Zealand, Singapore and the UK.

I want to work on both companies and their entire teams to Omnicom. Turning to Omni, our data and insights platform, as I've mentioned in our last call, looking beyond our media business, our practice areas are increasingly leveraging Omni to identify insights for their specific disciplines and clients.

Last quarter, Omnicom Public Relations Group launched omniearnedID, a solution that allows clients to evaluate the outcomes of earned media with the same precision as paid media. More recently, our Health Group launched Omni Health which integrates key healthcare data sets within a privacy compliant ecosystem.

Thanks to this momentum, the Omni platform has trained 20,000 users in more than 50 markets and it is become the foundation of our agency operating systems company wide. Since we launched Omni three years ago, we've continued to invest in it's credentials as the industry's leading marketing orchestration and insights platform.

As compared to other solutions built on limited proprietary data sets, Omni's open source approach connects more data sources across more media and commerce platforms to deliver better outcomes to our clients.

In Q2 we will be launching Omni 2.0, using next generation API connections to seamlessly orchestrate identity sources and platforms in one collaborative workspace and a greater speed. Better and faster orchestration of data leads to more actionable insights and superior decisioning for our clients across all our networks and practice areas.

Just as important, Omni 2.0 continues to build on our commitment to consumer privacy and transparency. Our data neutral approach which results in the most diverse compilation of data sets continues to be rooted in a robust data privacy compliance methodology. This approach puts us in a strong position for a post cookie world, a few points on this arm.

Through our pioneering work creating data clean rooms, we have direct connections to the first-party data of many of our clients, because we are open source and data neutral, Omni works seamlessly across all garden environments, as well as the broader ecosystem.

At the same time we orchestrate data sets from about 100 privacy compliant sources to provide a comprehensive view of the consumer across devices.

As the marketplace and technologies continue to rapidly advance, we are confident our talent platforms and the strategies built on a foundation of our creative culture give us a competitive advantage in effectively serving both new and existing clients.

As testament to this success, we've had several key new business wins this past quarter including a multi-year agreement with Allianz, a leading financial services provider for creative development and production services.

Through this master framework agreement, Omnicom will produce work for Allianz on a global and local level offering creative solutions to activate global brand strategy for more than 70 countries where Allianz operates.

In addition after recently selecting OMD as its US media agency of record, Home Depot has named BBDO as its creative agency of record. Avocados from Mexico hired GSD&M as its agency of record. TBWA\Chiat\Day was named Agency of Record for three new clients, [indiscernible] and Schwan's Company.

During this -- picked up the strategic and creative accounts for Vanguard advantage and OMD won the media business for Dr. Scholl's. In summary, we made significant strides in revolving our services capabilities and organization to better service our clients with data science and technology, while remaining grounded in our core strength of creativity.

I'm proud to lead a company with an extraordinary group of people who continually deliver the best creative work in our industry from their unwavering dedication, creativity and innovation came a number of industry awards and recognition, here are just a few highlights.

For the drums world creative rankings, Omnicom was the number one holding company for the fourth year in a row and BBDO won the network category. Goodby Silverstein & Partners was named Campaign US' 2020 Advertising Agency of the Year, Critical Mass was named Ad Age's 2021 best places to work with.

BBDO TBWA and Goodby Silverstein & Partners were all named to fast companies prestigious list of Most Innovative Companies for 2021, making Omnicom the only holding company there are three agencies ranked in the top 10 in the advertising sector.

And PHD was named EMEA's Media Network of the Year and UK Media Agency of the Year at campaigns UK Agency of the Year Awards. Our people have a wealth of knowledge, experiences and perspectives that lead us to this innovation and forward thinking work.

The diversity of our group is something that needs to be celebrated, prioritized and improved upon and it's a strategic focus for us in the year ahead. With our launch of OPEN2.0 last year, we have made a clear action plan for achieving systemic equity across Omnicom.

We have more than doubled the number of DE&I leaders throughout Omnicom and we are establishing specific KPIs for our networks and practice areas to deliver on and to be measured by. I look forward to sharing the progress we are making on DE&I on our future calls.

As I discussed earlier, we're confident in both our organic growth expectations and EBIT performance for 2021. It has taken some time to turn the corner and we are now on a clear path to return to growth. At the same time, we know that we must continue to monitor the COVID-19 situation and to adapt to any unforeseen challenges that may arise.

If 2020 taught us anything it's through expecting unexpected and we will move forward maintaining our wage zones. As we continue to enhance our operations, we are also evaluating what the future of work looks like at Omnicom.

Our leadership on a local and office level are working on gathering feedback from employees and clients to help us decide what the new normal will be, one where we can service our clients efficiently, while also connecting with colleagues in the safest and most flexible way possible.

The incredible talent within Omnicom has helped us maintain business continuity through the lows of 2020 and overcome its challenges. We would never be here without their dedication, so a sincere thank you to everyone as we are at the beginning of the end of the pandemic. I will now turn the call over to Phil for a closer look at our results.

Phil?.

Thanks, John and good morning. As John said, as we move through the first quarter of 2021, we continue to see an improvement in business conditions, particularly when compared to the peak of the pandemic during the second quarter of 2020.

As we anticipated, we again saw sequential improvement in our organic revenue performance, a decrease of 1.8% in the first quarter of this year, which is a considerable improvement in comparison to the last three quarters of 2020.

And now that we've cycled through a full year of operations since the start of the pandemic, we expect to return to positive organic growth in the second quarter and for the full-year.

We continue to see operating margin improvement year-over-year resulting from the proactive management of our discretionary addressable spend cost categories and the benefits from our repositioning actions taken back in the second quarter of 2020.

Turning to Slide 3 for a summary of our revenue performance for the first quarter; organic revenue performance was negative $60.6 million or 1.8% for the quarter. The decrease represented a sequential improvement versus the last three quarters of 2020, including the unprecedented decrease in organic revenue of 23% in Q2, 11.7% in Q3 and 9.6% in Q4.

Regionally, although we continue to experience declines in the Americas, we continue to see improvement when compared to what we experienced over the previous three quarters. In Europe FX gains helped to offset negative organic growth and our Asia-Pacific region saw positive organic growth with a mixed performance by country.

The impact of foreign exchange rates increased our revenue by 2.8% in the quarter, above the 250 basis point increase we estimated entering the quarter, as the dollar continued to weaken against some of our larger currencies compared to the prior year.

The impact on revenue from acquisitions net of dispositions decreased revenue by four-tenths of a percent in line with our previous projection. And as a result, our reported revenue in the first quarter increased six-tenths of a percent to $3.43 billion when compared to Q1 of 2020.

I'll return to discuss the details of the changes in revenue in a few minutes. Returning to Slide 1, our reported operating profit for the quarter was $465 million, up 10.8% when compared to Q1 of 2020 and operating margin for the quarter improved 13.6% compared to 12.3% during Q1 of 2020.

Our operating profit and the 130 basis point improvement in our margins this quarter was again positively impacted from our actions to reduce payroll and real estate cost during the second quarter of 2020, as well as continued savings from our discretionary addressable spend cost categories, including T&E, general office expenses, professional fees, personnel fees and other items, including cost savings resulting primarily from the remote working environment.

Reported EBITDA for the quarter was $485 million and EBITDA margin was 14.2% also up 130 basis points when compared to Q1 of last year. On slide 2 of our investor presentation, we presented the details of our operating expenses.

As we've discussed previously, we have and will continue to actively manage our costs to ensure they are aligned with our current revenues.

In addition to the overarching structural changes we made during the second quarter, we continue to evaluate ways to improve efficiency throughout the organization, focusing on real estate portfolio management, back office services procurement and IT services. As for the details, our salary and service costs are variable and fluctuate with revenue.

They increased by about $7 million in the quarter, but excluding the impact of exchange rates, these costs were down by about 2.6%.

While it was a reduction in base compensation overall from the staffing actions we undertook during the second quarter of last year, it varies by agency and certain of our agencies have added people as business conditions improved in their markets.

In addition, third-party service costs were effectively flat on a reported basis and down slightly on a constant currency basis.

In comparison, these costs which are directly linked to changes in our revenue decreased nearly 40% in the second quarter of last year, 20% in the third quarter and 12.7% in the fourth quarter of 2020, consistent with the decline in our revenues across all of our businesses in those quarters.

Occupancy and other costs which are less linked to changes in revenue declined by approximately $18 million, reflecting our continuing efforts to reduce our infrastructure costs, as well as the decrease in general office expenses since the majority of our staff has continued to work remotely.

In addition, SG&A expenses declined by $15.2 million in the quarter and finally, depreciation and amortization declined by $3.7 million. Net interest expense for the quarter was $47.5 million, up $1.7 million compared to Q1 of last year and down $500,000 versus Q4 of 2020.

When compared to the fourth quarter of 2020, our gross interest expense was down $1.5 million and interest income decreased by $1 million.

When compared to the first quarter of 2020, interest expense was down $4.7 million, mainly resulting from $7.7 million charge we took in Q1 of 2020, in connection with the early retirement of $600 million of senior notes that were due to mature in Q3 of 2020.

That was offset by the incremental increase in interest expense from the additional interest on the incremental $600 million of debt we issued at the onset of the pandemic in early April 2020.

Net interest expense was also negatively impacted by a decrease in interest income of $6.4 million versus Q1 of 2020 due to lower interest rates on our cash balances. Based on our current debt portfolio structure and FX rates, we are anticipating net interest expense to be relatively flat in 2021 when compared to 2020.

Our effective tax rate for the first quarter was 26.8% up a bit from the Q1 2020 tax rate of 26%, but in line with the range we estimate for 2021 of 26.5% to 27%. Earnings from our affiliates was marginally positive for the quarter, representing an improvement compared to last year.

And the allocation of earnings to the minority shareholders in certain of our agencies was $18.2 million during the quarter, up about $4.6 million when compared to Q1 of last year, reflecting the improved performance this year in our less than fully-owned subsidiaries.

As a result, our reported net income for the first quarter was $287.8 million up 11.5% or $29.7 million when compared to Q1 of 2020. Our diluted share count for the quarter decreased three-tenths of a percent versus Q1 of last year to 216.8 million shares.

As a result, our diluted EPS for the first quarter was a $1.33, up $0.14 or 11.8% from the $1.19 per share when compared to our Q1 EPS for last year.

Returning to the details of the changes in our revenue performance on slide 3, organic revenue performance improved again compared to the reductions in client spending we experienced during last three quarters.

We continue to see our clients across a wide spectrum of industry sectors in geographic regions modify spending as they assess the continuing impact of the pandemic on their businesses. While helped by FX, our reported revenue for the first quarter was $3.43 billion or up $20 million or six-tenths of a percent from Q1 of 2020.

Part of our continuing efforts to provide meaningful information to our investors, we expanded the presentation of our CRM disciplines to give additional detail regarding the performance of these agencies which are now grouped within four disciplines.

CRM Precision Marketing which includes our precision marketing and digital direct marketing agencies, which were previously included in our CRM Consumer Experience discipline.

CRM Commerce and Brand Consulting which is primarily comprised of the Omnicom Commerce Group and our Brand Consulting agencies both previously included in CRM Consumer Experience.

CRM Experiential which includes our events and sports marketing businesses which was also included in CRM Consumer Experience and our CRM Execution and Support discipline which includes our field marketing, merchandising and point of sale, research and not-for-profit consulting agencies and remains largely unchanged.

Turning to the FX impact, on a year-over-year basis, the impact of foreign exchange rates was mixed when translating our foreign revenues to US dollars. The net impact of changes in exchange rate increased reported revenue by 2.8% or $95.7 million in revenue for the quarter.

While the dollar weakened against some of our largest major foreign currencies, we also saw some strengthening against the handful of others.

In the quarter, the dollar weakened against the euro, the British pound, the Chinese yuan and the Australian dollar, while the dollar strengthened against the Brazilian real, the Russian ruble and the Turkish lira.

In light of the recent strengthening of our basket of foreign currencies against the US dollar and where our currency rates currently are, our current estimate is that FX could increase our reported revenues by around 3.5% to 4% in the second quarter and moderate in the second half of 2021 resulting in a full year projection of approximately 2% positive.

These estimates are subject to significant adjustment as we move forward in 2021. The impact of our acquisition and disposition activities over the past 12 months resulted in a decrease in revenue of $15.1 million in the quarter or four-tenths of 1% which is consistent with our estimate entering the year.

Our projection of the net impact of our acquisition and disposition activity for the balance of the year including recently completed acquisitions and dispositions is currently similar to Q1. As previously mentioned, our organic revenue decreased $60.6 million or 1.8% in the first quarter when compared to the prior year.

The impact of the COVID-19 pandemic on the global economy and on our clients plan marketing spend appears to be moderating in certain major markets. As long as the COVID-19 pandemic remains a public health threat, global economic conditions will continue to be volatile.

We expect global economic performance and the performance of our businesses to vary by geography and discipline until the impact of the COVID-19 pandemic on the global economy moderates. We expect to return to positive organic growth in the second quarter and for the full year.

Turning to our mix of business by discipline on page 4, for the first quarter the split was 59% for advertising and 41% for marketing services. As for the organic change by discipline, advertising was up 1.2%.

Our media businesses achieved positive organic growth for the first time since Q1 of 2020 and our global and national advertising agencies again showed improvement this quarter when compared to the last three quarters, although performance remains mixed by agency.

CRM Precision Marketing increased 7.2% on continued strong performance and the delivery of a superior service offering. CRM Commerce and Brand Consulting was down 4.2% mainly related to decreased activity in our shopper marketing businesses due to client losses in prior quarters.

CRM Experiential continued to face significant obstacles due to the many restrictions from holding large events. In the quarter the discipline was down over 33%. CRM Execution and Support was down 13% as our field marketing non-for profit and research businesses continue to lag. PR was negative 3.5% in Q1 on mixed performance from our global PR agency.

And finally, our Healthcare agencies again facing a very difficult comparison back to the performance of Q1 2020 when they experienced growth in excess of 9% were flat organically, but the businesses remained solid across the group.

Now turning to the details of our regional mix of business on Page 5; you can see the quarterly split was 54.5% in the US, 3% for the rest of North America, 10.4% in UK, 17.1% for the rest of Europe, 11.7% for Asia Pacific, 1.8% for Latin America and 1.5% for the Middle East and Africa.

In reviewing the details of our performance by region, organic revenue in the first quarter in the US was down $18 million or 1%.

Our advertising discipline was positive for the quarter on the strength of our media businesses and our CRM Precision Marketing businesses, while our Healthcare agencies facing a very difficult comp from Q1 of 2020 were down 2.4%.

Offsetting these performances was our events businesses which once again experienced our largest organic decline over 34% in the US, while our other disciplines were down single-digits organically. Outside the US, our North American agencies were down 3.2%. Our UK agencies were down 6.4% organically.

Our CRM Precision Marketing, CRM Commerce and Brand Consulting and Healthcare agencies continue to have solid performance. They again were offset by reductions from our Advertising CRM experience [ph] among our major markets [ph] Belgium, Italy and the Netherlands were positive organically.

Germany, Ireland and France were down single-digits, while Spain was down double-digit, outside the Eurozone 5% during the quarter and organic revenue performance in Asia-Pacific for the quarter was up 2.5%.

Positive performance from our agencies in Australia, greater China and India were able to offset decreases in Japan, New Zealand, Singapore and Indonesia. Latin America was down 2.4% organically in the quarter. Our agencies in Mexico and Colombia were positive in the quarter, a double-digit decrease from our agencies in Brazil offset that performance.

And lastly, the Middle East and Africa was down 10% for the quarter. On Slide 6, we present our revenue by industry information for Q1 of 2021.

Again, we've seen general improvement in the performance across most industries when compared to the previous few quarters, but the overall mix of revenue by industry was relatively consistent to what we saw in prior quarters.

Turning to our cash flow performance on Slide 7; you can see that in the first quarter, we generated $382 million of free cash flow excluding changes in working capital which is up about $20 million versus the first quarter of last year.

As for our primary uses of cash on slide 8, dividends paid to our common shareholders were up $140 million, effectively unchanged when compared to last year. The $0.05 per share increase in the quarterly dividend that we announced in February will impact our cash payments from Q2 forward.

Dividend paid to our non-controlling interest shareholders totaled $14 million. Capital expenditures in Q1 were $12 million down as expected when compared to last year. As we mentioned previously, we reduced our capital spending in the near term to only those projects that are essential or previously committed.

Acquisitions including earn-out payments totaled $9 million and since we stopped stock repurchases, a positive $2.7 million in net proceeds represent cash received from stock issuances under our employee share plans.

As a result of our continuing efforts to prudently manage the use of our cash, we were able to generate $210 million in free cash flow during the first three months of the year.

Regarding our capital structure at the end of the quarter, our total debt is $5.76 billion, up about $650 million since this time last year, but down $50 million as of this past year end.

When compared to March 31 of last year, the major components of the change were the issuance of $600 million of 10 year senior notes due in 2030 which were issued in early April at the outset of the pandemic.

Along with the increase in debt of approximately $80 million resulting from the FX impact of converting our €1 billion denominated borrowings into dollars at the balance sheet date. While the change from December 31 was the result of just the FX impact of converting the euro notes.

Our net debt position as of March 31st was $863 million, up about $650 million from last year-end, but down $1.5 billion when compared to Q1 of 2020.

The increase in net debt since year-end was a result of the typical uses of working capital historically occurred in our first quarter, which totaled about $840 million and was partially offset by the $210 million we generated in free cash flow during the past three months.

Over the past 12 months, the improvement of net debt is primarily due to our positive free cash flow of $860 million. Positive changes in operating capital of $537 million and the impact of FX on our cash and debt balances which decreased our net debt position by about $190 million.

As for our debt ratios, our total debt to EBITDA ratio was 3.1 times and our net debt to EBITDA ratio was 0.5 times.

And finally, moving to our historical returns on slide 10, for the last 12 months, our return on invested capital ratio was 19.9%, while our return on equity is 34.5%, both reflecting the decline in operating results driven by the economic effects from the pandemic, as well as the impact of the repositioning charges we took back in the second quarter of 2020.

And that concludes our prepared remarks, please note that we've included several other supplemental slides in the presentation materials for your review. But at this point, we're going to ask the operator to open the call for questions. Thank you..

[Operator Instructions] Your first question comes from the line of Alexia Quadrani from JPMorgan. Please go ahead..

Thank you very much. So my first question really is on I guess the progression or the recovery. I mean if you can elaborate a little bit on sort of how you saw it in Q1, I'm not asking for like month-to-month, but just sort of any trends you saw.

And if you saw a faster pace of improvement maybe than you expected anything surprised you? And then given I guess given what you know year-to-date, I'm curious if any more color about Q2, I know you said that there should be growth in the second quarter, but given the super easy comps I guess should we see outsized growth sort of at least mid-teens not higher in Q2.

So any color you can provide would be very helpful? Thank you..

Phil, your two first..

Sure. As far as the months, Alexia, I'm not sure, yes, we focus on them and treat the trends that we might see as meaningful especially given COVID.

But I think given the comps in Q1 going into the quarter, we expected the first quarter to be a challenge, but things broadly speaking, things have been improving throughout the end of the second half of 2020 and into 2021 pretty consistently.

So we've seen those trends improve, we've seen it in our results as we gone through the year and as we've gone through the quarter, which is why we're optimistic about the rest of 2021.

As far as Q2 growth, you know from the data we have today and we'll be getting an update again over the next two weeks in our meetings with our operating companies, but we're certainly optimistic that our growth expectations are not going to be what we would consider a normal or typical quarterly growth pattern given the comps of Q2 of 2020.

We certainly expect to do better than we normally would and there's a lot of positive trends.

There are some things that are happening or could happen that are out of our control in terms of some of the larger markets in Europe and some of the challenges they've been having with COVID, but as the vaccine continues to roll out in the US and globally, our growth expectation certainly for Q2 are pretty robust..

And then, just a follow-up if I may. Thank you for giving us further detail on CRM, that's very helpful in the release and then in the commentary. I'm just curious, though given the outsized decline in Experiential even before the pandemic it looks like it was underperforming.

I'm curious what your thinking is about that business long-term?.

The business that we have Alexia, really like it long-term just to truth. Domestically, our clients who generally -- big events, Olympic type of events and very well established events that aren't going to decline once people can actually return to attending activities.

And there is also and we're still looking at domestic market, the things that we do with respect to recruiting people for the US government, which will keep us on the road for quite a while. I mean so positive in the US once movement and schools reopen and people are increasing number of people are allowed back into longstanding events.

And with respect to our international business, that's very exciting. I mean, the biggest aspects of that business when it returns is China which is already started, established clients, big car companies, very well established very well financed markets in the Middle East and just the biggest markets in Western Europe.

So it's a business that we've held on to and we've kept all the critical people and in some instances our individuals have expertise in certain categories that their clients have continued to pay us at least something with the promise that we keep them on board and don't lose them because the clients feel that they have great knowledge of their products and what their strategies are so.

I mean it's not a huge business, it's big enough to hurt you in downtimes and makes a contribution both from a profit EBIT point of view, as well as our revenue point of view when things open up.

And since we are positive about it and probably more positive than other people and some of their competitors, there might even be an additional boost when things do open up because a lot of people have been had the staying power to continue those businesses during this period of time..

The only thing I would Alexia is that there as we've gone through the pandemic, I think we found out that or the numbers have demonstrated internally that is quite a bit especially in the domestic business.

Strategic work that our businesses are doing for their clients not just purely big event driven, so there is a base of business that clients find strategic value and engaging with our businesses that has been leads us to kind of conclude that, yes, there is a little more downside in the type of environment we've just been in, but there should be even more upside as we get back to a more normal environment in the future..

Thank you..

Sure..

Your next question comes from the line of Julien Roch from Barclays. Please go ahead..

Yes, good morning, John. Good morning, Phil. Thanks very much for the better disclosure and the recasting of CRM from Q4 to continuing the steam of improved disclosure Publicis not gives me the organic for the US 60% of the revenue was up mid-single digit in Q1.

So if you could give me the media organic for the Group and then which gives me the organic for international. So, could we get other media organic for Q1 or indication of what media did in Q1 and approximately how much is media in total revenue, my first question.

The second one is John said in his opening remarks that margin will be up year-on-year ex last year repositioning costs. So can we have more color, I mean is it up 10 basis, 20 basis points, 30 basis point.

And then last one is, I know the welcome news resumption of buyback, can we have an idea of the kind of size you're going to do for the next quarters. Thank you..

So I'll start Julien, but could you just repeat the margin question for clarity?.

Yes, so John said margin will be up, so can we have some more color, I mean when does up mean, does it mean 10 basis points, 20 basis points?.

Okay. So just to start on the media point, yes, we don't break out specifically and frankly when you go through the practice areas and the disciplines that we report, the vast majority of those disciplines actually have media in their numbers. So we don't carve it out and look at it that way.

Essentially businesses like PR and healthcare and precision marketing, there are media components to those businesses, they are integrated into those businesses, several markets throughout the world advertising and media are integrated and it isn't as simple is just pulling out a median number.

Certainly, we did indicate that media grew in the first quarter not, I would say not robustly relative to the first quarter of last year, but we're comfortable with the disclosures we make as far as adding the disciplines and providing what we think is very useful and helpful information similar to how we look at the business from a management perspective.

As far as margins go, I think what we said, we still hold to which is we look at 2019 as the best proxy of what ongoing margin expectation should be for our business.

You know, I think we look at the first part of coming out of the pandemic when it's likely the travel and related and some of the other controllable cost can continue to be reduced relative to the past as likely benefiting our margins in the near-term.

But in terms of looking at the business prospectively, you know, '19 is probably the best proxy and I can tell you what we've always said which is we always are looking for efficiencies and trying to expand our operating margins, but we're mostly focused on our operating EBIT dollars and the margins kind of fall into place.

We're going to continue to invest where we believe the best organic growth opportunities are and we're going to continue to drive operating profits and our margin performance. We think will be a positive result if we continue that approach.

Last question on the buyback front, I don't think we have today sitting here a margin, sorry a buyback dollar amount in mind.

Yes, I think with very consistent approach to capital allocation, we'll continue to pay healthy dividend, we've been pursuing acquisition opportunities in the areas where we think there is most promise in our disciplines that we're in today as we said before.

And the amount of money we spend on buybacks is going to be the residual if we can find more acquisitions, we're going to put more of our free cash flow in any one year into those acquisitions that we less for buybacks as a result and certainly that approach in that strategy we're planning on consistently following that as we emerge from the pandemic and get back into growth mode..

Thank you very much..

Thank you..

Your next question comes from the line of Michael Nathanson from MoffettNathanson. Please go ahead..

Thanks. One for John, one for Phil. John, I know we're still early in our recovery, but I guess want to take you to wherever the new normal looks like and I wonder what's your view of organic growth for your company when we get out of this, right, all the structural changes we've seen in digital and consumer behavior.

What -- so what's your view, will Omnicom grow faster because of that when we get back to whatever that you said it looks like that's one. And so can you talk a bit about the impact of the pandemic on the field marketing business, right, it's down a time.

And maybe you could share about may be cadence when that returns back to normal that's hurting the institutions core business that would be helpful too. So, thanks..

Sure.

I know absolute proof points of this, but I've been in the business, as you know forever and I'm really confident that because of changes, minor strategic which shifts in our portfolio, doubling down and focused on the area of growth that emerging from COVID, we will see when we compare to the past couple of years continued growth at a faster pace for certain, and as we've always said, on and for a number of years as far as difficult to achieve.

Our objective is GDP plus and I really think that that is what's in our future over there and very bullish as we emerge from COVID on the positions, the strategies we put in place, some of the other actions that we've taken. And so there's a lot of confidence.

Now remind you against that when we get into that accelerated growth going out 18 months, 24 months and probably expect wage pressures to go up for sure in key positions and things that we want to focus on.

So, that being terribly specific, I'm very -- I feel very, very confident about the near term and the near longer term us getting back to better growth rates..

On the field marketing front, I think the business, our business is largely pan-European. We've done some dispositions over the years throughout the Group and really streamlining quite a bit.

We expect the field marketing business to be back in growth mode as well just like the rest of our business, I'd say for looking at the 9 months beginning April 1st, we expect field marketing grow for the rest of 2021.

It might be a bit choppy in the three quarters, I'm not quite sure I commit to every quarter being kind of sequential growth, but the field marketing business given its pan-European then had some setbacks recently in some of their key markets because of -- some of the shutdowns that happened recently in Europe.

But we do expect them to get back into growth mode and you know I think that we are confident that the business itself will perform once some of the external factors kind of remove that have held it back throughout the pandemic. We also have part of the business in India that seems to be holding up pretty well right now..

Thanks, guys..

Sure..

Your next question comes from the line of Steven Cahall from Wells Fargo. Please go ahead..

Thanks. Phil, maybe first I wanted to just touch on that M&A commentary that you made, it sounds like you're -- you said you wanted to be a bit more aggressive in certain areas. I think that commentary it might just maybe sound a little stronger than the way you've discussed it in the past.

So I'm just curious if there is more sizable acquisition opportunities out there the last few years, it's really exceeded a few 100 million in a single year.

So, just curious if you're seeing something that might be a little bit more strategic and the tuck-ins that you've done more historically?.

Yes. I think your view of that is correct. We've certainly got more of an emphasis and more of a focus that we've been placing on not just dealing with inbound M&A candidates, but also seeking appropriate opportunities in the areas that we want to invest in.

And we've been I think clear on our last call in particular where we're focused certainly, broadly speaking the precision marketing space, e-commerce, media and healthcare and in John's prepared remarks, he commented on that specifically. So yes, we do currently plan to be a little more aggressive in terms of looking for the right opportunities.

We won't lose our discipline in terms of pricing expectations, but we will be more aggressive in terms of pursuing those opportunities. I don't think there is going to be a dramatic change though while we'll look at big deals, the deals we can successfully integrate with our existing platforms are the ones that we found were best.

We're going to consider any and all deals in the areas that we're committed to and want to invest in, but we are going to do, we are going to pursue acquisition opportunities in a variety of sizes and to the extent that we can do more rather than less that's certainly our intention..

Yes. The only thing I might add is I'm happy today with our M&A team and the efforts that they're going through then certainly then any of the time in the last decade. And just to echo what Phil said having that positive outlook, we'll look to do only accretive acquisitions and there is a lot of silly money that sometimes we're competing against.

So we're not planning to get silly and try to explain to you as strategic..

That's great. [Indiscernible]..

Go ahead, sorry..

I'm sorry, I just had a quick follow-up on the media side, maybe not so giving specific color on it, but I'm just curious if that's been a leading indicator of growth to come, so maybe be growing a little faster than the Group. And I think we've seen a couple of media, big media accounts come up for review this year.

I'm just wondering if I sort of back on the cycle where you think there's going to be a lot of media business progress this year. Thanks..

Sure. Media will grow faster this year based upon the forecast we've seen to date. The mix may change, it won't change, our mix dramatically because we're so big, but digital has really taken over and we've crossed the threshold that's never really going to change from kind of one or two things on that.

And what was the second part of your question, I'm sorry?.

I think we're comfortable with the media business and the media assets we have. We certainly, we certainly think that we're close to being past a very difficult year, continue to grow as we head into growth mode here starting in the second quarter and we're comfortable with the assets we have.

I don't think we would expect to see in 2021 as media appaloosa [ph] 3, but we have seen quite a bit of activity and interest from across a bunch of different industries.

Frankly because during the pandemic, it was difficult for them to make a change in their service providers and internally throughout their organization but I think as things normalize and they come out of it, we do expect activity in terms of new business opportunities to pick up..

Yes.

One final point on this that I want to add which is really a fundamental point is when we look at our Omni product as you hear us talking about three years ago, it started primarily in the media area and we've been very successful and I think in some ways COVID has helped us in moving its use and as their fundamental base operating philosophy across our practice areas, which really allows the benefits that it brings to work very closely with our creative assets in a way that in the past was up more forced outcome, it's now becoming more of a natural outcome across the practice areas that we're functioning in.

And I think that it makes us more competitive going forward..

Great, thank you very much..

Operator, I think -- thank you. I think we have time for one more question operator..

Okay. That question comes from the line of Tim Nollen from Macquarie. Please go ahead..

Sure, for fitting me in here. I just wanted to ask a question, could you just explain a little bit more about what that business entails.

I know you mentioned the shopper marketing component was led to that business being down 4%, but what are the other things you do there and what might the growth be in that division if you were to take shopper marketing out? Thanks..

So, on -- in CRM Commerce and Consulting, our Brand Consulting businesses are in there and we've got some specialty production assets which are relatively small in that group.

You know, I think we've seen growth in the quarter in the specialty production assets, the Brand Consulting business we expect once we're through Q1 to get back into growth mode and we expect the shopper commerce businesses to get back to growth mode, but the challenges they need to need to overcome relate more to I think some of the client losses they've had recently that they need to cycle through.

So we're comfortable with the assets that we have, we're going to continue one of the areas we're focused on as far as potential acquisition opportunities as e-commerce to build on that business, but we think the commerce and consulting discipline, the components of it are businesses that we have high expectations for in terms of that future growth profiles..

I think we're running out of time..

Thank you all for taking the time to join us on the call today..

Thanks, everybody. Stay safe..

Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation and for using AT&T Teleconference. You may now disconnect..