Omnicom UK revenue drops 10% after sterling collapse

The recent collapse in sterling has dragged down Omnicom's UK revenue after it fell more than 10% during the last quarter.

Omnicom CEO John Wren
Omnicom CEO John Wren

The owner of the BBDO and OMD networks reported that UK revenue contracted by 10.4% over the three months to 30 September to $347.9m (£282.81m). 

On a constant currency basis, Omnicom’s UK growth was 5.2% and outperformed North America (1.7%) and the rest of Europe (2%) compared to the same quarter last year, while Omnicom’s worldwide revenue increased 2.3% to $3.71bn (£3.02bn).

The US company's UK business has been affected by the 18% fall in the value of the pound against the dollar since the UK voted to leave the European Union in June. 

The group’s advertising division reported a 3.6% increase in organic revenue for the third quarter, which fared better than CRM (up 1.6%), but was less than public relations (up 4.4%).

For the first nine months of 2016, Omnicom’s UK growth has shrunk 5.3% to $1.05bn, or grew 3.6% on a constant currency basis.

During the last quarter Omnicom’s biggest UK ad agency, Abbott Mead Vickers BBDO, lost Sainsbury's creative account to independent shop Wieden & Kennedy. Omnicom then shut media agency M2M in the UK last month following a string of account losses.

Omnicom’s operating income was up 5.8% to $453.1m (£368.97m) for the quarter year on year, while earnings before interest, taxes and amortisation of intangibles was up 6% to $482.1m.