Omnicom Group Inc. (NYSE: OMC) announced net income – Omnicom Group Inc. for the first quarter of 2021 of $287.8 million as compared to $258.1 million in the first quarter of 2020. Diluted net income per share for the first quarter of 2021 was $1.33 per share compared to $1.19 in the first quarter of 2020.
Omnicom’s worldwide revenue in the first quarter of 2021 increased 0.6% to $3,426.9 million from $3,406.9 million in the first quarter of 2020. The components of the change in revenue included an increase in revenue from the positive impact of foreign currency translation of 2.8%, a decrease in acquisition revenue, net of disposition revenue of 0.4% and a decrease in revenue from negative organic growth of 1.8%, primarily due to the negative effects on our revenue attributable to the COVID-19 pandemic, when compared to the first quarter of 2020.
Organic growth in the first quarter of 2021 as compared to the first quarter of 2020 in our fundamental disciplines was as follows: Advertising increased 1.2%, CRM Precision Marketing increased 7.2%, CRM Commerce and Brand Consulting decreased 4.2%, CRM Experiential decreased 33.2%, CRM Execution & Support decreased 13.3%, Public Relations decreased 3.5% and Healthcare was flat.
Across all of regional markets, organic growth in the first quarter of 2021 as compared to the first quarter of 2020 was as follows: the United States decreased 1.0%, Other North America decreased 3.2%, the United Kingdom decreased 6.4%, the Euro Markets & Other Europe decreased 3.2%, Asia Pacific increased 2.5%, Latin America decreased 2.4% and the Middle East & Africa decreased 10.2%.
Operating profit increased $45.2 million, or 10.8%, to $465.4 million compared to $420.2 million during the first quarter of 2020. Our operating margin for the first quarter of 2021 increased to 13.6% versus 12.3% for the first quarter of 2020.
For the first quarter of 2021, Omnicom’s effective income tax rate increased period-over-period to 26.8% from 26.0%.
COVID-19’s Negative Impact on Quarter
The negative effects of the COVID-19 pandemic began to have a significant impact on our businesses late in the first quarter of 2020. In the beginning of 2021, the company continued to experience the negative impact of the pandemic on our organic revenue compared to the same period in the prior year.
However, the impact from the COVID-19 pandemic on the global economy appears to be moderating in several of their markets, and Omnicom expects to achieve positive organic revenue growth beginning in the second quarter of this year and for the full year 2021.
“As long as the COVID-19 pandemic remains a public health threat, global economic conditions will continue to be volatile depending on several factors, including new information concerning the severity of the pandemic, government actions to mitigate the effects of the pandemic in the near-term, and the resulting impact on our clients’ spending plans. 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 continuously assess the impact of the COVID-19 pandemic and adjust our response related to changes in our business,” the company said in a release.
In the second quarter of 2020, Omnicom took steps to strengthen its liquidity and financial position that were intended to mitigate any potential impact of the COVID-19 pandemic on our liquidity.
Among other things, the company issued $600 million of 4.20% Senior Notes due 2030 and entered into a $400 million 364-day revolving credit facility, or 364 Day Credit Facility, and suspended share repurchase activity. The 364 Day Credit Facility expired without ever being drawn on April 2, 2021.