Omnicom suffered a 4.4% fall in revenue in the first three months of the year as the US advertising giant was hit hard by exchange-rate movements.
The BBDO and DDB owner’s global revenue declined 4.4% to $3.47bn (£2.66bn) in the first three months of 2019, despite achieving organic growth in most key markets and disciplines.
Omnicom said its revenue was impacted negatively by a 3.4% change in foreign exchange rate movements.
This was particularly bad in Europe, where Omnicom’s first-quarter revenue decreased by $124.6m.
Revenue in the UK, which accounts for almost 10% of Omnicom’s European income, was down $19.3m, despite organic growth being up by 1.3%, thanks to the weakening of the pound against the dollar.
The pound's value has fallen in the past year as the prospect of a "no deal" Brexit increasingly preoccupied the foreign exchange market. Following's last week's extension to delay the UK's withdrawal from the European Union, the pound has drifted lower against the dollar to $1.30 as this story was published (compared with $1.43 a year ago).
Overall, Omnicom's organic growth was 2.5% up on the first quarter of 2018, with increases in advertising (5.1%) – driven in part by new clients including Ford – CRM execution and support (3.3%) and healthcare (6.8%). The PR and CRM consumer experience divisions were down 0.6% and 0.5% respectively.
In North America, by far Omnicom’s biggest market, Omnicom grew 2.2% organically to $1.99bn (up 2% in the US), 3.1% in Europe, 2.1% in Asia-Pacific, 12.8% for the Middle East and Africa, while Latin America decreased 3.0%.
Net income for the first quarter decreased slightly year on year by 0.3% to $263.2m.
Wren on M&A: 'I already have a lot of good agencies'
Speaking to investors yesterday, Omnicom chief executive John Wren said the company was not going to change its merger and acquisition strategy in response to recent deals from rival Publicis Groupe, which is buying data company Epsilon, or consultancy giant Accenture, which is acquiring Droga5.
Wren said: "[Droga5] is a very good agency. I already have a lot of really good agencies, so that is not something that would appeal to me.
"The kind which we are acquiring, large and consultative type of IT practices, not the Sapients of the world – because we think those big builds of the past are of the past, but like Credera, which we did last year, and a few others, we would continue to do those but I don't see them to be terribly expensive.
"And Epsilon... I haven't looked at Epsilon in a long time. But from what I've observed of Epsilon, they are a good company, they have some good clients. They don't have anything from what I can observe as unique or self-proprietary in terms of what it does that, if it's necessary, is not replicated."