Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — Q1 2020 Earnings Presentation
20 slides from Stagwell's earnings presentation, Apr 29, 2020
Slide 1: First Quarter 2020 Results Management Presentation
April 29, 2020 Management Presentation First Quarter 2020 Results
Slide 2: Forward Looking Statements & Other Information
2 FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation contains forward - looking statements . Statements in this presentation that are not historical facts, including without limitation the information under the heading "Financial Outlook" and statements about the Company’s beliefs and
Slide 3: Summary
3 SUMMARY • Organic Revenue growth of 2.0% driven by growth in Integrated Agencies and All Other Segments • Aided by ongoing cost - reduction initiatives, MDC delivers year - over - year growth of 84.3% in 1Q 2020 Adjusted EBITDA and 560 basis point improvement in Adjusted EBITDA Margin to 12.1% • N
Slide 4: First Quarter 2020 Financial Highlights
4 ----- DRAFT ----- • Revenue of $327.7 million versus $328.8 million in the prior year period • Organic revenue increased by 2.0% versus the prior year period • Net loss attributable to MDC Partners Inc. common shareholders of $2.4 million in the first quarter of 2020 versus $2.5 million in the pri
Slide 5: Consolidated Revenue and Earnings
5 CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) Three Months Ended March 31, 2020 2019 % Change Revenue: $ 327.7 $ 328.8 (0.3 ) % Operating Expenses: Cost of services sold 222.7 237.2 (6.1 ) % Office and general expenses 66.4 67.1 (1.1 ) % Depreciation and amortization 9.2
Slide 6: Revenue Summary
6 Organic revenue increase of 2.0% in the first quarter of 2020 versus the prior year period. Note: Actuals may not foot due to rounding REVENUE SUMMARY (US$ in millions, except percentages) Three Months Ended Revenue $ % Change March 31, 2019 $ 328.8 Organic revenue 6.4 2.0 % Non - GAAP acquisition
Slide 7: Revenue by Geography and Segment
7 REVENUE BY GEOGRAPHY AND SEGMENT 1 Effective in the first quarter of 2020 , the Company reorganized its management structure resulting in the aggregation of certain Partner Firms into integrated groups (“Networks”) . In connection with the reorganization, we reassessed our reportable segments to a
Slide 8: Revenue by Client Industry
8 Top 10 clients decreased to 22.4% of revenue versus 23.5% a year ago (largest <4.7%) REVENUE BY CLIENT INDUSTRY Year-over-Year Growth by Category Q1 2020 QTD Above 10% Retail, Consumer Products, Automotive, Transportation and Travel/Lodging 0% to 10% Communications, Healthcare Below 0% Food and Be
Slide 9: Adjusted EBITDA
9 ADJUSTED EBITDA (1) 1 Effective in the first quarter of 2020, the Company reorganized its management structure resulting in the aggregation of cert ai n Partner Firms into integrated groups (“Networks”). In connection with the reorganization, we reassessed our reportable segments to align our exte
Slide 10: Covenant EBITDA
10 COVENANT EBITDA 2019 2020 Covenant EBITDA (LTM) (1) (US$ in millions) Q1 Q2 Q3 Q4 Q1 Q4 - 2019 - LTM Q1 - 2020 - LTM Net income (loss) attributable to MDC Partners Inc. common shareholders $ (2.5 ) $ 0.8 $ (5.1 ) $ (10.5 ) $ (2.4 ) $ (17.3 ) $ (17.2 ) Adjustments to reconcile to operating income:
Slide 11: Summary of Cash Flow
11 SUMMARY OF CASH FLOW • Operating activities driven by seasonal working capital requirements • Investing activities primarily driven by the sale of Sloane (US$ in millions) Three Months Ended March 31, 2020 2019 Net cash used in operating activities $ (20.0 ) $ (81.2 ) Net cash provided by investi
Slide 12: 2020 Financial Outlook
12 2020 FINANCIAL OUTLOOK Note: Given the uncertainties in the global business environment arising from the COVID-19 pandemic, the Company is not providing a 2020 outlook for Revenue and Covenant EBITDA at this time.
Slide 13: Appendix
13 APPENDIX
Slide 14: Revenue Trending Schedule
14 REVENUE TRENDING SCHEDULE Note: See appendix for definitions of non - GAAP measures Note: Actuals may not foot due to rounding (US$ in thousands, except percentages) 2019 2020 Q1 Q2 Q3 Q4 YTD Q1 Revenue United States $ 263,017 $ 284,659 $ 271,671 $ 296,698 $ 1,116,04 5 $ 264,561 Canada 22,378 24,
Slide 15: Adjusted EBITDA Trending Schedule
15 ADJUSTED EBITDA TRENDING SCHEDULE (1 ) Adjusted EBITDA is a non - GAAP measure. See appendix for the definition Note: Actuals may not foot due to rounding (US$ in thousands, except percentages) 2019 2020 Q1 Q2 Q3 Q4 YTD Q1 PARTNER FIRMS Revenue $328,791 $362,130 $342,907 $381,975 $1,415,803 $327,
Slide 16: Reconciliations
16 RECONCILIATIONS (US$ in thousands)(1) GAAP revenue from prior year acquisitions for 2020 and 2019 relates to acquisitions which occurred in 2019 and 2018, respecti ve ly. (2) Contributions to organic revenue represents the change in revenue, measured on a constant currency basis, relative to the
Slide 17: Available Liquidity
17 AVAILABLE LIQUIDITY 1 1 Subject to available borrowings under the Credit Facility. Note: Actuals may not foot due to rounding (US$ in millions) March 31, 2020 December 31, 2019 Commitment Under Facility $ 250.0 $ 250.0 Drawn 125.0 — Undrawn Letters of Credit 17.6 4.8 Undrawn Commitments Under Fac
Slide 18: Current Credit Picture
18 CURRENT CREDIT PICTURE 1 These ratios and measures are not based on generally accepted accounting principles and are not presented as alternatives measures of operating performance or liquidity . Some of these ratios and measures include, among other things, pro forma adjustments for acquisitions
Slide 19: Definition of Non-GAAP Measures
19 DEFINITION OF NON - GAAP MEASURES In addition to its reported results, MDC Partners has included in its earnings release and supplemental management presentati on certain financial results that the Securities and Exchange Commission defines as "non - GAAP financial measures." Management believes
Slide 20: MDC Partners contact details
MDC Partners Innovation Center 330 Hudson St. 10th Floor New York, NY 10013 646 - 429 - 1800 www.mdc - partners.com