Stagwell Inc. · NASDAQ:STGW
Stagwell — Investor Presentation (September 2024)
30 slides from Stagwell's investor presentation, September 2024
Slide 1: Investor Presentation September 2024
Investor Presentation SEPTEMBER | 2024
Slide 2: Disclaimer
DISCLAIMER Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such risk factors include, but are not limited to, the following: • risks associated w
Slide 3: Disclaimer: Forward-Looking Statements
DISCLAIMER Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company’s repre
Slide 4: Stagwell at a Glance
at a Glance Mark Penn CHAIRMAN & CEO $2.5B 57% FY23 GAAP REVENUE DIGITAL IN FY23 “ Stagwell is a holistic, technology-first enterprise services company, owing to $360M ~$270M its combination of ad agency creative and technology enterprise. FY23 ADJ. EBITDA FY23 NET NEW BUSINESS We differentiate ours
Slide 5: From Zero to Market Hero
INTRODUCTION TO STAGWELL THE STAGWELL STORY Founded in late 2015 with a vision for a new digital-first From Zero to Market Hero marketing company, Stagwell has grown to become the first Marketing Services company in 40+ years to reach competitive scale Stagwell is driven by 2015 2017 2019 2021 TODAY
Slide 6: The Legacy Advertising Market Is Ripe For Disruption
STAGWELL OPPORTUNITY THE LEGACY ADVERTISING MARKET Is Ripe For Disruption $18B ~ $60B $2.5B spent with the OTHERS $37B top 4 legacy holding $16B companies1 Stagwell represents only 2% $7B $15B ~ $145B IBM iX of the global advertising and $12B Deloitte marketing services market Digital $11B spent on
Slide 7: Stagwell Is Uniquely Positioned To Deliver Outsized Growth
STAGWELL OPPORTUNITY STAGWELL IS UNIQUELY POSITIONED To Deliver Outsized Growth Industry Recognition Driving Increase in Opportunities & Size of Wins M&A Engine Growing Digital & Geographical Footprint Geographical Diversification Expanding Global Client Remit Digital Transformation Leading Growth D
Slide 8: Visionary Leadership From An Industry Veteran
STAGWELL OPPORTUNITY VISIONARY LEADERSHIP From An Industry Veteran Mark Penn CHAIRMAN & CEO Steve Ballmer A Record of Vision FORMER CEO, MICROSOFT FIRST INVESTOR, STAGWELL & Accomplishment In 2015, Mark believed that the marketing industry was ripe “I have known Mark for many, many years. for disrup
Slide 9: Experienced Leadership Team With A Proven Record Of Success
STAGWELL OPPORTUNITY EXPERIENCED LEADERSHIP TEAM With A Proven Record Of Success FOUNDER & POLLSTER Founded Penn and Schoen in 1975 with his Harvard roommate Doug Schoen GROWER Under Penn’s leadership, firm expanded to 200+ people with offices around the world. Mark Penn ADVISOR Served key corporate
Slide 10: Integrated Platform For The Modern Marketer
STAGWELL TODAY INTEGRATED PLATFORM For The Modern Marketer Stagwell Marketing Cloud Group 9% SaaS and DaaS Tools for the In-House Marketer Digital Transformation 25% Building Digital Platforms & Consumer Experiences Performance Media & Data 13% Integrated Omnichannel Media, Data & E-Commerce 9% Cons
Slide 11: Blue-Chip Customer Base: Demonstrated Ability To Land & Expand
STAGWELL TODAY BLUE-CHIP CUSTOMER BASE Demonstrated Ability To Land & Expand 80% CLIENT RETENTION YEAR-OVER-YEAR2 $375M GROWTH 11% REVENUE FROM TOP 10 CUSTOMERS1 IN AVERAGE RELATIONSHIP TOP 10 CUSTOMERS3 4K+ BLUE CHIP CUSTOMERS 1 LTM net revenue from 10 largest customers by 2023 net revenue 2 Client
Slide 12: Strategic Value-Added Investment Platform
STAGWELL TODAY STRATEGIC THE VALUE-ADDED PLATFORM Investment Platform Global Media Affiliate Client Marketing Network Reach Services Unified & engaged corporate team delivering value-added $ Growth shared services driving both Central M&A Innovation Group Investment revenue & cost synergies Incentiv
Slide 13: Driving Significant Growth In Opportunities & Wins
STAGWELL GROWTH ACCELERATORS INCREASING INDUSTRY RECOGNITION Driving Significant Growth In Opportunities & Wins 25+ $324M TRAILING TWELVE MONTH “Stagwell’s Sport Beach was NET NEW BUSINESS1 the highlight of the festival” A-LIST ATHLETES 20%+ ANTICIPATED GROWTH IN VALUE OF RFP’S IN FY24 “Sport Beach
Slide 14: Systematically Expanding Our Digital & Global Footprint
STAGWELL GROWTH ACCELERATORS ACQUISITION STRATEGY Systematically Expanding Our Digital & Global Footprint INCREASING OUR GROWING OUR REVENUE FROM DIGITAL REVENUE MIX OUTSIDE OF NORTH AMERICA 57% 65% 20% 40% FOCUS Digital Transformation: Platform design, Increasing our global footprint AREAS optimiza
Slide 15: Global Diversification To Service Widening Global Client Remits
STAGWELL GROWTH ACCELERATORS GLOBAL DIVERSIFICATION To Service Widening Global Client Remits 5 80+ INTERNATIONAL GLOBAL $355M FY23 INTERNATIONAL NET REVENUE1 ACQUISITIONS TO GROW FOUNDATIONAL SERVICES IN KEY REGIONS2 AFFILIATES EXTENDING OPERATIONAL REARCH FOR THE COMPANY Adds digital creative › Aff
Slide 16: Digital Transformation: Leading Growth Driven By Emerging Tech
STAGWELL GROWTH ACCELERATORS DIGITAL TRANSFORMATION Leading Growth Driven By Emerging Tech EXPERIENCE Emerging technologies, like AI and AR, are driving monumental CHANGE shifts in the way consumers interact with the world around them. THIS REQUIRES TECHNOLOGY & The C-Suite are focused on accelerati
Slide 17: Stagwell Marketing Cloud: SaaS & DaaS Tools
STAGWELL GROWTH ACCELERATORS STAGWELL MARKETING CLOUD SaaS & DaaS Tools For The In-House Marketer $198M Building complementary software solutions leveraging the domain NET REVENUE expertise and distribution channels already in place at Stagwell from SMC Group in FY23 31% Y/Y GROWTH DIGITAL SERVICES
Slide 18: Stagwell Marketing Cloud Group Product Incubation Playbook
STAGWELL GROWTH ACCELERATORS STAGWELL MARKETING CLOUD GROUP Product Incubation Playbook WE BUILD We've developed a proven strategy to develop and incubate new technologies, making informed product roadmap decisions based off agency clients while ADVANCED leveraging our world-class tech team Faster S
Slide 19: Product Spotlight
STAGWELL GROWTH ACCELERATORS STAGWELL MARKETING CLOUD GROUP Product Spotlight Bringing a whole new level of stadium entertainment and fan engagement to sports and INTEGRATION WITH MLB’S NATIVE entertainment through shared AR BALLPARK APP Revolutionizing the PR process through AI, saving the PR profe
Slide 20: Financial Model: Adding It All Up
STAGWELL FINANCIAL MODEL ADDING Potential Equation for Success* ($M) It All Up 10-12% long-term organic growth target driven by: Stagwell Marketing Cloud (+20-30%) Digital Transformation (+10-20%) OPPORTUNITY Consumer Insights & Strategy (+5-15%) ~$3,500 TO GROW TO Performance Media & Data (+5-15%)
Slide 21: Stagwell Is Under-Appreciated
STAGWELL is UNDER- APPRECIATED Industry-leading Stock price doesn’t reflect NET REVENUE GROWTH how Stagwell is disrupting marketing landscape Best-in-Class ADJ. EBITDA MARGIN UNDER-VALUED Efficient CONVERSION OF EBITDA TO FCF On Virtually All Metrics (P/S, EV/EBITDA, P/E) Sustainable LEVERAGE POSITI
Slide 22: Appendix
= me SL ASWELL Appendix
Slide 23: GAAP Consolidated Operating Performance (Six Months)
GAAP CONSOLIDATED OPERATING PERFORMANCE Six Months Ended June 30, $ and Shares in Thousands 2024 2023 Revenue $ 1,341,227 $ 1,254,709 Cost of services 883,438 816,329 Office & general expenses 331,476 321,358 Depreciation & amortization 76,837 68,965 Impairment & other losses 1,715 10,562 Total oper
Slide 24: GAAP Consolidated Operating Performance (Full Year)
GAAP CONSOLIDATED OPERATING PERFORMANCE Full Year Ended Dec 31, $ and Shares in Thousands 2023 2022 Revenue $ 2,527,177 $ 2,687,792 Cost of services 1,621,174 1,673,576 Office & general expenses 661,250 601,536 Depreciation & amortization 142,831 131,273 Impairment & other losses 11,395 122,179 Tota
Slide 25: Reconciliation of GAAP Net Income to Adj. EBITDA (Six Months)
RECONCILIATION OF GAAP NET INCOME TO ADJ. EBITDA Six Months Ended June 30, $ in Thousands 2024 2023 Net Loss $ (4,667) $ (7,834) Net loss attributable to noncontrolling & redeemable noncontrolling interests 420 6,029 Net loss attributable to Stagwell Inc. common shareholders (4,247) (1,805) Non-oper
Slide 26: Reconciliation of GAAP Net Income to Adj. EBITDA (Full Year)
RECONCILIATION OF GAAP NET INCOME TO ADJ. EBITDA Full Year Ended December 31, $ in Thousands 2023 2022 Net Income $ 41,642 $ 50,044 Net income attributable to noncontrolling & redeemable noncontrolling interests (41,508) (30,125) Net income attributable to Stagwell Inc. common shareholders 134 19,91
Slide 27: Reconciliation of Combined Net Revenue Growth to Organic (Six Months)
RECONCILIATION OF COMBINED NET REVENUE GROWTH TO COMBINED ORGANIC NET REVENUE GROWTH COMPONENTS OF CHANGE CHANGE $ In thousands, Net Revenue – Six Net Revenue – Six except Months Ended June Foreign Net Acquisitions Total Months Ended June percentages 30, 2023 Currency (Divestitures) Organic Change 3
Slide 28: Reconciliation of Combined Net Revenue Growth to Organic (Full Year)
RECONCILIATION OF COMBINED NET REVENUE GROWTH TO COMBINED ORGANIC NET REVENUE GROWTH COMPONENTS OF CHANGE CHANGE $ In thousands, Net Revenue - Year Net Revenue – except Ended December 31, Foreign Net Acquisitions Total Year Ended December percentages 2022 Currency (Divestitures) Organic Change 31, 2
Slide 29: Capital Structure
CAPITAL STRUCTURE Net Debt & Debt-Like ($M, as of 6/30/2024) Share Count5 (Thousands, as of 7/25/2024) Revolving Credit Facility $ 334 Class A 111,731 Bonds 1,100 NCI1 22 DAC2 71 Class C 151,649 (equal voting & economic rights to Class A) RNCI3 23 Less: Investments4 15 Share-based awards6 8,699 Less
Slide 30: Thank You
= me SL ASWELL Thank You