Good morning, ladies and gentlemen. And welcome to the Omnicom First Quarter 2015 Earnings Release Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. At this time, I’d like to introduce you to today’s host for today’s conference call, Vice President, Investor Relations, Shub Mukherjee. Please go ahead.

Good morning. Thank you for taking the time to listen to our first quarter 2015 earnings call. On the call with me today is John Wren, President and Chief Executive Officer; and Phil Angelastro, Chief Financial Officer. We hope everyone has had a chance to review our earnings release, we have posted on our website at www.omnicomgroup.com, both our press release and the presentation covering the information that we will be reviewing this morning. This call is also being simulcast and will be archived on our website. Before we start, I have 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 our 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 the reconciliation of those measures to the nearest comparable GAAP measures in the presentation material. 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. And then we will open up the line for your questions.

Thank you, Shub. Thank you for joining us this morning. I am pleased to speak to you about our first quarter results. As I am sure you have seen Omnicom had a solid first quarter with organic growth of 5.1% giving us a strong start to the year. We also met our margin targets for the quarter and are on track to meet our internal targets for the full year. As reported in February, the strong U.S. dollar versus other currencies in the world will have a negative impact on our results for 2015. In the first quarter, 44% of our total revenue was derived from markets outside the U.S. FX reduced our non-U.S. revenue by $226 million, represent a 13.9% of international revenue and 6.5% of our total revenue. It is important to point out that our non-U.S. operations are naturally hedged as both revenue and expenses are in the same currency. As a result, primary impact of these FX movements is in our dollar reported revenue and earnings. Phil will provide more details about the impact of the FX on our results later in the call. Our operational results, excluding the impact of currencies were excellent during the quarter. More specifically, looking at organic growth by region, North America was up by 4.8%, primarily driven by brand advertising and more specifically, our media operations. Our U.K. growth was very strong at 9.3%, reflecting solid results across our portfolio of agencies and discipline. Euro markets showed improvement and there are signs of stability in most countries in the region. Growth during the quarter was 2.7%. France had slightly positive growth, Germany continued to be positive and Spain performed very well, while the Netherlands remained negative. Outside the Euro markets, Czech Republic, Russia and Turkey outperformed during the quarter. Although,…

Thank you, John and good morning. As John said, our businesses have continued their strong operating performance, delivering against their financial and strategic objectives and maintaining their focus on meeting the needs of their clients. Our organic revenue growth for the quarter of 5.1% was above our expectations. While our underlying businesses continued to perform well, the negative impact of FX continues to create a considerable headwind on our revenue. This quarter, the impact of FX reduced revenue by 6.4%, or $226 million. And as was the case last quarter, FX was negative across every one of our significant foreign markets. As a result, an inclusive of the slightly positive impact from our net acquisition, revenue for the quarter was about $3.5 billion, down nine-tenths of a percent versus Q1 last year. I will discuss our revenue growth in detail in a few minutes. FX also had a negative affect on our EBITDA for the quarter, which decreased $2.1 million to $405 million versus our reported figure of $407 million in Q1 last year. However, because the vast majority of our expenses are denominated in the same local currencies as our revenue and currencies in virtually all markets were down, the negative impact of FX on our operating margins was not significant for the quarter. Additionally, we continue to see the positive impact of our efforts to increase efficiencies throughout the organization. EBITDA margin for the quarter was 11.7%, up 10 basis points versus Q1 2014. And operating income or EBIT decreased $5 million to $378 million and our operating margin of 10.9% was unchanged versus Q1 2014, primarily due to the year-over-year increase and the amortization of our intangible assets resulting from our recent acquisitions. Now, turning to the items below operating income. Net interest expense for the quarter…

[Operator Instructions]

Excuse me, Operator -- just I forget to mention -- before we start the questions, we are happy to have Daryl Simm, CEO of Omnicom Media Group with us here today for the Q&A session.

Thank you. Our first question today comes from the line of Alexia Quadrani, representing JPMorgan. Please go ahead.

Thank you. John, I think in your opening remarks, I think you mentioned that you are on track to meet your internal target. I am sure if that was the margins or just organic growth or just in general. I guess my question is, can you update us on, I guess, your targets for organic growth for the year and also for margin if that was what you’re implying?

Sure. This is terribly conservative, Alexia, I think from the point of view that with currencies moving and the changes around the world, we’re very comfortable by keeping our revenue target at 3.5% and -- whereas I am not 100% ready to forecast margins for the balance of the year, our internal goal starting now for the second quarter is to hold our margins from what they were the prior year.

And then any impact if you can highlight -- I am sorry if I missed this, the impact on a programmatic on the organic revenue growth rate in the quarter?

Yes. Alexia, the programmatic business grew sequentially from Q4 to Q1 by about 10%.

Okay. And then since you have Daryl in the room, just one more and maybe Daryl can update us on I guess what you’re seeing generally in advertising trends going into the second quarter, I guess any commentary about upfront would be great? Thank you.

Well, it’s still -- Alexia still early from in terms of confirmed client budgets for the upfront of course. But on the other hand, we do have expectations and the expectations are that the trends that we’ve really seen, I would say over the past 18 months or so, are going to continue. And what that means on balance, we’ve seen of course above average growth in digital and that’s been driven by premium video which we see continued increased interest. And on the TV upfront side, I think we should expect a continuation of the kind of cautious approach that we saw this past year between upfront and short-term naturally. Some clients are going to want to secure specific properties, particularly if they have initiatives during the year. But outside of that, we see a somewhat cautious approach. For those of us that have been following the upfront for a long time, I think we are used to the past where the upfront was really a selling time for the entire year that set the market and it really has become I think the beginning of the annual sale season. And it’s an important part of it, that’s the beginning of the year -- of the sale season.

Thank you very much.

Our next question comes from the line of David Bank with RBC Capital Markets. Please go ahead.

Okay. Thank you. I want to follow up on some of the kind of the broad thematics. I think John opened with resisted temptation to drill down further on the quarter. And I think used opportunity to ask some sort of bigger picture questions here. And it seems to me that as we speak with industry players on the advertiser side, the agency side, the media operating side, the biggest thing now I will talk about in terms of technology offering us and we’re really beginning to see it is kind of more efficient achievement of reaching impressions we target, right. That’s the part of all this. And in the long run, people really seem to think that advertisers will increase budgets as long as the return on investment is positive. But in the short run, I am not so sure, there seems to be such pressure on the multinational public companies with their FX pressures and dealing with shareholders that I don’t -- I am not really sure how much of that efficiency they are reinvesting. And how do you feel about that right now? Do you think clients are redeploying the savings that you’re bringing them in terms of the efficiency of reach, or they sort of banking it? And how do you see that developing over time? Thanks for the long question.

Yes. Sure. I would say many clients are reinvesting those efficiencies and there are few and that as you suggested have other challenges which they put in front of them, they are still supporting their brands, but maybe not to the level that of the efficiencies. I think clients start -- each brand starts with targets and goals and objectives that they have to reach. And if we’re able to assist them in achieving those targets in a more efficient way, which is the hope, the money doesn’t always have to be reinvested back directly into advertising. For the most part, that’s not a bad thing for an Omnicom. The principal way that we earn our revenues and profits are really in helping clients navigate through the complexity of this new marketplace and where audiences are, how to reach them, how to obtain quality content so they’ll be interested in it. So where something which might have been invested in say traditional TV in the past, if we found an alternative way to get that audience for less money, our part of that might have increased, whereas the traditional TV seller might not have -- might see the decline in their sales.

Okay. Thank you.

Our next question today comes from the line of Tim Nollen with Macquarie. Please go ahead.

Hi. It’s Tim Nollen from Macquarie. I wanted to ask about your comments on the upfront market, the TV market. Clearly, seeing some of the changes coming, you talk about a lot more streaming activity going on. I wonder if you could talk about from the agency perspective, from Omnicom’s creative and maybe from volume perspectives, what are doing that might be a little bit different this year with the TV companies to work beyond, just the TV ad sale into a broader behavior or targeting ad sale, incorporating TV and digital viewing?

Daryl, you might want to try this one?

Yes, absolutely. I mean, this is something we’re very interested in. In fact, as we look at video, video is across a number of different platform, some of it coming from the so-called traditional providers, others coming from full episode providers like Hulu, others coming from more pure digital plays like the YouTube, the Yahoo’s, the AOL’s and what not. But as we go into sale season, what we’re seeing are real initiatives that are coming from some of the more traditional providers in terms of not just offering of digital video but offering of -- I would say packages or ideas and concepts that allow us to bridge between -- more aggressively between the conventional sale and the digital capability and the digital products that they now have. And I anticipate that that’s going to be an ever more significant part of the conversations going ahead. And we’ve certainly seen coverage over the past few days of I think leaders of major media companies discover and they like talking about that very concept. And it’s something that both, our clients and we as agencies are very interested in discussing how we extract more value for our clients using that kind of approach.

So does that mean -- you think maybe that what we consider traditional definition of TV advertising they become our archaic. I mean, it’s -- how content they consumed? And 'TV' lose a share of ad revenues that that might not necessarily matter as long as there more and more dollars been placed across different points of viewership, is that a fair assessment?

Yes. I think from a high level, that’s exactly right. But you also need to consider that when we look at movement of video, it’s not necessarily exclusively away from television simply because its site sound and motion. Advertisers look at their plan and their strategy to reach consumers holistically and they are zero basing it year-on-year increasingly as opposed to simply looking at it within a bucket called television and reallocation. It’s coming from a number of different sources. So I think we have to look at the whole environment in a much more fluid basis than we had in the past as you assess those kinds of company.

Great. Thanks. Can I ask one more question please it’s totally unrelated? John, you’re talking about your emphasis on training. It struck me on these things a bit more about you’re trending focus on economy universe at this time in the previous calls. I just wonder how you look at an organic development, organic talent development versus acquisition which have been fairly slow. I don’t know if it’s an apples-to-apples comparison or if you can maybe talk a bit more about that please and your expenditure of capital on that?

Sure. Well, training, we opened Omnicom University in 1995 and it’s been dedicated through recessions to good times to bad times. So we at the top put a lot of time and attention into training and developing our people. And that is also true if you go to each one of our major subsidiaries. With the environment and the changes in the environment, what we started in ‘95 is more important today than it’s ever been [Indiscernible]. Not only do our data sciences and I’d say your people need to keep up with all the changes that are going on, our creative people, our account people, everyone of our employees has to be very current in terms of watch out there how it can be used to creatively create the tools and products that we need. So we’re very pleased to have the foundation that we have and we keep it adjusting and adding to it. And that asset which was developed in ‘95, for a long time was really principally based just in the U.S. Over the last couple of years we’ve taken that throughout our entire global portfolio and we’ll continue to do that. And I forgot the first part of your questions.

Acquisition?

Acquisitions. We just formed the new dedicated acquisition group, one that we even had in several years. And we’re looking at quite a number of opportunities, probably on a more formal basis than we have in the last several years. And so I expect over time, we will be doing more but nothing -- no big banging type of things. Sensible acquisitions -- midsized that fit, what we see as our strategic growth areas, both in the United States in certain product areas and in certain key emerging markets.

Yeah. I mean, just to add on that, I think we’ve always been consistent in saying and it still holds true. But as we approach our capital allocation process to the extent that we can find more acquisitions that need or fit in strategy requirements, we’re going to try and do more acquisitions in anyone given year than less. We don’t have a fixed box of acquisition dollars and/or share buyback dollars that we intend to spend going into a year. So, I think the pipeline is good and to the extent, we can do more than we’ve done in the past and in a particular year, we will. But to the extent that we don’t find deals that meet our strategic requirements or the fit requirements then we’ll continue to operate as we have.

And to give you a very timely example, when we’ve done with this call, my next two hours after that is with an acquisition candidate.

Great. Thanks very much for the color.

Our next question today comes from the line of Bill Bird with FBR. Please go ahead.

Good morning. I might have missed it, John, but could you give the net new business figure for the quarter and maybe speak to just the new business pipeline overall? Thank you.

So, Phil, you have the number?

Yeah. The number was just below $1.1 billion for the quarter. That doesn’t include -- does not include the most recent Bacardi one.

In terms of the pipeline, it’s pretty good. We have one or two. We’re going to wind-up defending, but for the most part the people and client -- potential clients we are talking to, we feel very good about it. It’s changed here little bit. You still get formal bids and competitions, but increasingly, we are getting assignments as we did like in Bacardi, which did not require a bid. There was a consolidation with certain objectives that approved. We are going to help that company reach. So it’s healthy, always could be. We have a very good track good record. So the more or somebody else business that goes into review, yeah, the more -- the better opportunity is for us to win. So, but it’s pretty decent though.

And what are your current thoughts on the phasing of your stock buybacks and your leverage? Are you at a level of leverage that’s consistent with your target or could you see it going higher?

I think our leverage is probably right where we have historically been, right around that. And our focus is primarily on maintaining our rating at that principal focus in terms of how we look at our capital structure. So I think it’s probably safe to say that, you shouldn’t expect to see the next 12 months in terms of buyback activity to be anywhere similar to the last 12 months. Over the last 12 months we’ve bought back about a 1.250 billion of stock. So we have some catching up to do as we had discussed last May. I don’t think you can expect the activity be at that level. Certainly, we will continue to look at it in context of our free cash flow as far as continuing to pay dividend. What acquisitions are out there that we do endeavor to do, is going to reduce the number. But certainly the activity prospectively as we look at the next 12 months is going to be down relative to the last 12 months.

Thank you.

We will go to line of John Janedis representing Jeffries. Please go ahead.

John, since your last call, there has obviously been a lot of talk around rebates and general business practices across the industry? Can you remind us to what extend you use them and the transparency with clients? I am just try to understand the risk if any to Omnicom?

Yeah. I’ll let Daryl -- better I’ll let Daryl, who heads the group, answer that first and then I will add my comments.

Right. Well, there’s certainly been a lot of coverage on it. But, certainly, from our standpoint, our media agencies in the U.S. don’t seek rebates and the U.S., of course, is not a rebate based marketplace from a negotiation standpoint. So in terms of our media agency clients, in the U.S. they receive all value that gets negotiated on their behalf. Whatever that form is, whether it’s discount, whether it’s other quantitative benefits, whether its qualitative benefits. And they are negotiating in a very competitive marketplace. So our buyers are pushing hard to, frankly, extract maximum value out of those vendors in order to meet our individual client expectation. And of course, all of the clients that we engage with, we have comprehensive contracts that govern not only the services, but we provide them. But they specify performance requirements as well. So that’s kind of cornerstone of trust I think in terms of how we run our business.

And I am happy for the question, because there has been a lot of innuendo and comments against the industry, and we know how we operate and have consistently operated. So clearing the air on this is a positive thing. One other thing is, we are fully participating, I think, the ANA after having allowed that presentation to occur and there is now, I think, a working group between the ANA…

And the AAAA’s.

… and the AAAA’s to, yeah, to go through this…

Yeah. To go through the presentation that we have provided at the ANA.

It was somewhat odd to me that no specific allegation was came against anybody, even though in that presentation that had redacted contracts and other things. So we are little bit confused. We don’t find it helpful. So as quickly as jointly the ANA and the AAAA’s can get to the conclusion the better off we will all going to be.

Yeah. Thanks, John. Maybe separately, I think, you have been somewhat cautious on the potential for U.S.-based multi-nationals to adjust budgets based on the moves in currency? Is there any evidence of that and do you think that risk has diminish somewhat for the year?

There is a sense. I don’t have the proof. But U.S. economy appears to me to be getting stronger and if history guides anything, those budgets will increase as demand increases for and clients are going to support their strongest growth areas. So I’m cautiously optimistic, I am going to, I am just not willing to publicly forecast the year more than what I can see at the moment.

Thank you very much.

And our next question is from the line of Craig Huber representing Huber Research Partners. Please go ahead.

Good morning. I’ve a few housekeeping questions. First, programmatic, you touched on this briefly, but in dollars how much programmatic training efforts on that half of your clients help your revenue on year-over-year basis in the quarter, please?

In the first quarter that number was about $40 million of year-over-year growth in the quarter versus the first quarter of last year.

Okay. Then also for your share buybacks in the quarter just on the same page, what was the gross number of shares you bought back and what was the net number of shares, please?

Just give me a second to get that number. So in the quarter the buyback number was in shares, I think, was 3.4 million shares.

Do you have that net number?

I don’t have the net number handy but we can get that. We can get that for you.

Okay. And then also your comments on acquisitions, I think you said that you have a new team that’s looking at acquisitions on the corporate level. Should we -- and further you may start to do some larger acquisitions that just sort of tuck into -- you mentioned midsized. In my mind, you have been more doing tuck-ins over there, over the many years, maybe -- giving a much larger company looking maybe something little bit larger than you historically have done?

Really, it all comes down to the opportunity but the areas that we’re focused on are geographic in nature, which means that there are not -- they certainly fit within our historical profile. And different forms of partnerships over the last several years, we’ve formed over 100 plus partnerships with various companies either in technology and some other areas. In very rare instances but a couple we might be interested in becoming partners with some of those folks. But if you’re characterizing what I said and thank you for asking the question, they are going to be -- they are not going to be large. They are going to be closer to our historic pattern than us developing any new pattern. Let me put it that way.

Okay. My last question please, on the U.K., you obviously had very strong performance of 9.3% of organic growth. Is there anything one time in nature there? I just want to get little -- more clarity why it was so strong there and how do you feel about that market for your operations for the rest of the year? Do you think that’s possible to be up in the high single digits for the rest of the year?

I think our view is especially in the first quarter which is relatively small quarter. You can’t draw too many trends when you start narrowing it down to regions or disciplines et cetera. So the more you narrow that number especially in a quarter, a 90-day period we don’t think it’s going to drive the trend for that particular, in this case, country. Our businesses in the U.K. have been performing very well, very consistently actually over some time. And they have done very well in the market. We expect them to continue to perform well as the year goes on. But I -- I don’t think I’d say we expect based on our internal forecast today that we are going to be in the high single digits to low double digits for the U.K. the rest of the year. Some of that could be a bit of timing in the quarter. Some of it could be just a fact that is first quarter and number is relatively small number compared to the number for the year. So I wouldn’t draw too much of a trend other than the trend that our businesses in the U.K. continue to perform well is one that we expect to continue.

I echo exactly what Phil said. I guess, we were aided by the change in management of one or two major subsidiaries and they’ve had -- they've gotten off to a great start. So the market share and not the economy in the U.K.

Can I just sneak in one more question please? I appreciate your guys’ comments on the upfront market. Talking of linear TV as you call it here for the upfront market, do you guys think it’s possible this year that CPMs for traditional television in the upfront could actually be down this year?

Obviously, it’s a supply and demand market place and there are still supply issues in the linear TV market place that keep pressure on price beyond, I think what you might reasonably normally expect, defining your ratings would be less value at lower prices not necessarily the case. I think the major part of that formula is going to be the balance between the long-term and short-term strategies that sellers take in this market place. I would add I think that CPMs of course have one way to look at the market place. I think the general trend here is a longer term trend is more significant and that is that generally speaking, our clients are moving to -- many clients at least are moving to -- looking at business measures. What do the aggregation of the investments that they are making across media types do to move their business with the data capabilities that we have? And they are somewhat less inclined to focus simply on what maybe called process measures, which are the CPMs reaching frequencies, is becoming increasingly an overall ROI discussion with our clients. But specifically to your question on CPM, I think the balance between long-term and short-term strategies from sales standpoint will dictate that. Operator, we are getting closer to the market open. So, I think we have time for one more call. Thanks, Craig.

All right. Our final question today then will come from the line of Ben Swinburne with Morgan Stanley. Please go ahead.

Thanks. Good morning. I’d sort of pick up on the programmatic question maybe broaden little bit for Daryl and for Phil. So the -- I think the comps got harder for you in the first quarter on programmatic but the number was bigger than at least we expected. Can you assume that’s mostly are all domestic and if I strip that out, it looks like the organic U.S. growth, maybe a little bit, maybe around 3%, maybe a little bit less, which is slower than it’s been for the last three quarters? I don’t know if you’ve looked at it that way. And if you think that’s the right math, I just want to get your commentary on whether that business is bigger than you thought and what the impact is to your overall organic growth? And then I will -- since it’s a last question, I will ask Daryl. One of the things on programmatic we’ve heard is just a lack of premium inventory, generally particularly around video. The TV networks have been very reluctant to move into these platforms and even some of the digital players are nervous about it. Can you just give us an update on whether you are seeing a change there and whether that’s something that you think can make this business grow even faster in 2015?

Yeah. Well, I think it can certainly help the business grow faster. But if we look at the programmatic business today, there is no question that the great majority of it, as it exists today is display-based business. But the client requirements that we are seeing from the plans that we put together show a great demand for programmatic videos. So it did cross my mind that the demand is there and where there is demand, generally speaking, we will see supply respond to that. But the availability of -- I would say premium video is not simply a programmatic. A question it goes beyond that, as our clients looked at it, both programmatically and as alternatives in the upfront marketplace because content and context are so important to the kind of clients that we have. So if there is the -- whether it’s the content has the right affinity or whether it’s simply just wholesome enough for their brand is key and access to that kind of bringing video is key to growth. There is no question of the demand therefore.

Yeah. Thank you.

On the specifics to your question, Ben, so the programmatic growth was not just U.S. only. That’s pretty much went many markets throughout the world now. We started that ramp up back in Q4 of ’13. The growth in the quarter itself relative to Q1 of ’14, we thought was pretty good. Again, we are not really drawn too many trends on one particular quarter as it relates to the rest of the year. I don’t think the first quarter is going to tell the story for the year. But I’d say the programmatic business in Q1 of ’14 was probably still continuing to ramp up and the performance this year in the first quarter was good. But I don’t think we’ve drawn any trends at that level of growth that, that number is necessarily going to continue throughout the rest of the year.

Thank you.

Okay. Thank you. Thank you everybody. Thanks for joining the call.

Ladies and gentlemen, that does conclude our conference for today. We thank you for your participation and using the AT&T Executive Teleconference service. You may now disconnect.