Philip Angelastro: Sure. So as we’ve done for well over 10 years, we built out the Omni platform, we built it out through internal investments. And some of our competitors actually went out and did acquisitions, bought somewhat similar assets in terms of data analytics and other technologies similar to the omni platform. And in terms of comparing what amortization gets added back or not, we think the reality is whether we acquire it or we build it ourselves, you’d want to look at that amortization of the investments that you’ve made, and that would be the appropriate amount to add back. In terms of rough order of magnitude, if you look at the total, if you look at the total of the add back related to acquired intangibles and internally developed strategic platform amortization, that’s about 75% of the total.
And the non-acquisition amortization is about 10% or 15% of that. So it’s not a large proportion of the number. But about 25% of the total relates to administrative amortization expense related to administrative intangibles things like ERP systems and workflow systems, etc. So we think that’s an appropriate and probably most comparable way to look at the numbers compared to some others in the marketplace.
Michael Nathanson: [indiscernible] Thank you, Phil.
Philip Angelastro: Sure.
Operator: Your next question comes from Craig Huber with Huber Research Partners. Please go ahead.
Craig Huber: Yes. Thank you. John, if you could just go back to Flywheel for a little bit here. You guys have obviously cleaned up your portfolio of your performing assets at least there’s quite a bit to your credit (ph), obviously to this Flywheel acquisition here. I’m just curious, does that change your outlook long term, the potential for organic revenue growth here to maybe accelerate off this roughly 4% to 5%, you’re talking about [indiscernible] 4.1% last year. Do you feel increasingly optimistic longer term about accelerate growth rate, I realize is law of larger numbers here, you’re a much bigger company now than you were 10, 15 years ago. Your thoughts, please.
John Wren: Sure. Yes. It’s more — I’d answer it a little bit differently. Because we’ve cleaned up the portfolio, and there’s always work to do, but not nearly as much work as we’ve done in the past, because we’ve cleaned up the portfolio, I think the products and the offerings that we have today are really market leading. And as we expose them to the marketplace and our clients and probably do a better job, actually, of marketing Omnicom and its products to the world, I do think that it will sustain our organic growth going forward. I have enough difficulty giving you guidance for the balance of this year. So I don’t want to get too far ahead of my shoes, but I’m very confident that that we’re going to be the most appropriate supplier in the marketplace with the type of activities that clients are looking to buy from a group like ours.
And so with that confidence, that’s just not me and what we buy or what we integrate, that is really reflective of the management teams that work on the various aspects of Omnicom and are executing and delivering our products worldwide. But at the end of the day, it comes down to those people, the products that we make available to them. But the creative genius and innovation that they bring to improving that product on a constant basis. So yes, I’m bullish, I guess.
Craig Huber: Thank you for that John. And Phil, if I could just ask you real quick. In terms of the margins for this year, I think you’re talking about roughly flat margins for the year. Just walk us through a little bit about the costs in your mind that are holding that back from actually going up something you talked about the integration costs of a Flywheel, Flywheel being dilutive. I think you said the margins the first three quarters, but what else should we think about, please? What are the internal investment spending you’re doing, etc.?
Philip Angelastro: Sure. So the approach to margins hasn’t changed much over the years. We’re always trying to find the right balance between growing the business in a sustainable way, making the appropriate investments in the business for the future. So Omni and Omni platform is a great example of that and balancing that with an appropriate margin and return to shareholders. So as it relates to 2024, certainly, we’ve got some — an integration process to go through with Flywheel, as we said, going really well, but more to be done. We do expect to continue to make the investments we’ve been talking about with respect to the Omni platform and ongoing investments in Flywheel and Flywheel Commerce Cloud and ultimately, we see some opportunities with our cost structure being flexible to be part of the equation and how to maximize margins overall.
We’re looking at the long-term health of the business continuing to make those investments, that’s part of what goes into the ultimate end result when it comes to margins because really, we’re trying to grow operating profit dollars, not just hit a percentage. So I think the Flywheel transition and integration certainly a big part of it, along with continued investments in Omni and the Flywheel Commerce Cloud platform and AI balanced with some benefits coming from other initiatives we continue to pursue, whether it’s the real estate portfolio, offshoring, near-shoring, etc., all of that is factored into the equation. And that’s how we reach the expectations we have as we look out at all of 2024.
Craig Huber: Great. Thanks, guys.
Philip Angelastro: Sure. Thank you.
Operator: There are no further questions at this time. This will conclude today’s conference. Thank you for your participation. You may now disconnect.
