Omnicom Group (OMC) risk factors, FY2024 10-K

Other

1. 01Adverse economic conditions, a reduction in client spending, a deterioration in the credit markets or a delay in client payments could have a material effect on our business, results of operations and financial condition
2. 02A period of sustained inflation across our major markets could result in higher operating costs
3. 03In an economic downturn, the risk of a material loss related to media purchases and production costs incurred on behalf of our clients could significantly increase, and methods for managing or mitigating such risk may be less available or unavailable
4. 04Geopolitical events, international hostilities or acts of terrorism could have a material adverse effect on our business, results of operations and financial condition
5. 05Global public health crises or pandemics or other similar health crises could adversely impact our business, results of operations and financial condition

Business and Operational Risks

1. 06Clients periodically review and change their marketing and communications requirements and relationships. If we are unable to remain competitive or retain key clients, our business, results of operations and financial condition may be adversely affected
2. 07Acquiring new clients and retaining existing clients depends on our ability to avoid and manage conflicts of interest arising from other client relationships, retaining key personnel and maintaining a highly skilled workforce
3. 08The loss of several of our largest clients could have a material adverse effect on our business, results of operations and financial condition
4. 09We rely extensively on information technology systems, and cybersecurity incidents could adversely affect us
5. 10We are subject to risks related to our use of generative AI, a new and emerging technology, which is in the early stages of commercial use

Risks Related to International Operations

1. 11Currency exchange rate fluctuations have impacted, and in the future could impact, our business, results of operations and financial condition
2. 12We operate in high-growth markets and developing countries, which often carry greater risks and uncertainties that could have a material adverse effect on our business, results of operations and financial condition

Risks Related to Acquisitions

1. 13We may be unsuccessful in evaluating material risks involved in completed and future acquisitions
2. 14Our goodwill is an intangible asset that may become impaired, which could have a material adverse effect on our business, results of operations and financial condition

Risks Related to the Proposed Merger with IPG

1. 15The Merger may not be completed, and the Merger Agreement may be terminated in accordance with its terms
2. 16Failure to complete the Merger could negatively impact the price of shares of our common stock, as well as our business and results of operations
3. 17Uncertainties associated with the Merger may cause a loss of our and IPG’s management personnel and other key employees, which could adversely affect the business and operations of the combined company following the Merger
4. 18Our and IPG’s business relationships may be subject to disruption due to uncertainty associated with the Merger, which could have a material effect on our business, results of operations, financial condition and cash flows or those of the combined company following the Merger
5. 19The Merger Agreement subjects us to restrictions on business activities prior to the effective time of the Merger
6. 20We are expected to incur significant costs in connection with the Merger and integration of the two companies, which may be in excess of those anticipated by us
7. 21Litigation relating to the Merger, if any, could result in an injunction preventing the completion of the Merger and/or substantial costs to us
8. 22The failure to integrate our and IPG’s businesses and operations successfully in the expected time frame may adversely affect the combined company’s business and results of operations
9. 23The Merger may result in a loss of our and IPG’s clients, service providers, vendors, joint venture participants and other business counterparties, and may result in the termination of existing contracts
10. 24The combined company may fail to realize all of the anticipated benefits of the Merger
11. 25The future results of the combined company following the Merger will suffer if the combined company does not effectively manage its expanded operations

Legal and Regulatory Risks

1. 26Compliance with ever evolving federal, state, and foreign laws relating to the handling of information about individuals involves significant expenditure and resources, and any failure by us or our vendors to comply could materially adversely affect our business, results of operations and financial condition
2. 27Among other things, such laws generally: require disclosures about the data collection, use, and disclosure practices of covered businesses, and provide individuals expanded rights to access, delete, and correct their personal information, and opt out of certain sales or transfers of personal information
3. 28Expectations relating to environmental, social and governance considerations expose us to potential liabilities, reputational harm and other unforeseen adverse effects on our business