Slide 1: Fourth Quarter & Full Year 2022 Earnings Presentation
Fourth Quarter & Full Year 2022 EARNINGS PRESENTATION MARCH 2 | 2022
Slide 2: Forward Looking Statements & Other Information
FORWARD LOOKING STATEMENTS & OTHER INFORMATION This document 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”), and the Priva
Slide 3: Definitions of Non-GAAP Financial Measures
DEFINITIONS OF NON-GAAP FINANCIAL MEASURES In addition to its reported results, Stagwell Inc. has included in this earnings release certain financial results that the Securities and Exchange Commission (SEC) defines as "non-GAAP Financial Measures." Management believes that such non-GAAP financial m
Slide 4: Full-Year 2023 Financial Outlook
Full-Year 2023 7.5 - 10% Organic Net Revenue Growth FINANCIAL Outlook 10 - 14% Organic Net Revenue Growth Ex-Advocacy $450M - $490M In Adjusted EBITDA 50 - 60% EBITDA Conversion on Free Cash Flow $0.90 - $1.05 In Adjusted Earnings Per Share Note: Guidance as of 3/02/2023. All figures presented on a
Slide 5: Fourth Quarter & Pro Forma Full Year 2022 Highlights
FOURTH QUARTER & PRO FORMA FULL YEAR 2022 HIGHLIGHTS NET DEBT: $979M | NET LEVERAGE RATIO: 2.17x | FY STOCK BUYBACKS: $52M Leading GROWTH Expanding INTERNATIONALLY 15% FY Net Revenue Growth, 14% Organic Growing twice as fast internationally vs. domestic 12% Q4 net revenue growth, 8% organic 26% FY n
Slide 6: Summary Pro Forma Combined Financials
SUMMARY PRO FORMA COMBINED FINANCIALS Three Months Ended December 31, Twelve Months Ended December 31, $ in Thousands 2022 2021 2022 2021 Net Revenue $ 583,446 $ 519,692 $ 2,222,153 $ 1,926,814 Billable Costs 124,739 92,235 465, 639 297,529 Revenue $ 708,185 $ 611,927 $ 2,687,792 $ 2,224,343 Billabl
Slide 7: Pro Forma Net Revenue
PRO FORMA NET REVENUE Three Months Ended December 31, 2022 Twelve Months Ended December 31, 2022 $ in Thousands Net Revenue Change Net Revenue Change 2021 Net Revenue $ 519,691 $ 1,926,814 Organic revenue 43,970 8.5% 278,455 14.5% Acquisitions (divestitures), net 26,937 5.2% 39,321 2.0% Foreign curr
Slide 8: Net Revenue by Geography
NET REVENUE BY GEOGRAPHY % OF NET REVENUE Organic Growth Y/Y 12.6% 9.0% Q4 Geography Q422 PF FY 2022 United States 9% 14% 78.4% United Kingdom 20% 30% Other (4)% 6% 11.5% 7.9% TOTAL 8% 14% FY 2022 80.6% Note: Figures presented on a Pro Forma basis giving effect to the combination as if completed on
Slide 9: Global Network
GLOBAL NETWORK Stagwell’s Affiliate Network Significantly Expands Our Global Footprint Europe North America • Austria • Ukraine • Belgium • France • Bulgaria • Germany • Italy • Netherlands • Canada • Latvia • Poland • USA • Romania • Spain • Mexico • Slovak Republic • Sweden Asia Pacific • Slovenia
Slide 10: Our Principal Capabilities
OUR PRINCIPAL CAPABILITIES 57% Q422 1 Digital Transformation 57% FY22 Building & Designing Digital Platforms & Technology 2 Performance Media & Data Addressable on a Global Scale 3 Consumer Insights & Strategy Tracking Across the Entire Consumer Journey 4 Creativity & Communications Blue-Chip Custom
Slide 11: Net Revenue Growth by Capability
NET REVENUE GROWTH BY CAPABILITY % REVENUE OF NET 25% Q422 PF FY 2022 Q4 Organic Net Net Revenue Organic Net Net Revenue 21% Principal Capability Revenue Growth Growth Revenue Growth Growth 11% 43% Digital Transformation 21.5% 21.8% 33.4% 33.5% Performance Media & Data 2.5% 12.5% 9.6% 18.3% Consumer
Slide 12: Adj EBITDA Growth by Capability
ADJ EBITDA GROWTH BY CAPABILITY % EBITDA* OF ADJ. Adj. EBITDA* Growth Y/Y 29% Q4 17% Principal Capability Q422 PF FY 2022 10% 44% Digital Transformation 47% 45% Performance Media & Data (14)% 16% Consumer Insights & Strategy 49% 31% 37% Creativity & Communications 16% 2% FY 2022 TOTAL 19% 19% 14% 9%
Slide 13: Ex-Advocacy Net Revenue & Adjusted EBITDA
EX-ADVOCACY NET REVENUE & ADJUSTED EBITDA $ in Millions Net Revenue Adjusted EBITDA 2022 2021 % Change 2022 2021 % Change Q4 Total 583 520 12.3% 123 104 19.0% Advocacy 53 35 48.6% 23 12 87.0% Total Ex Advocacy 531 484 9.6% 101 92 10.0% Net Revenue Adjusted EBITDA 2022 2021 % Change 2022 2021 % Chang
Slide 14: New Business Update
NEW BUSINESS UPDATE Net New Business Notable Business WINS & EXPANSIONS Q4 $42M FY 2022 $213M Avg. Net Revenue Q4 $6.3M PER CLIENT AT TOP 25 FY 2022 $24.1M PER CLIENT AT TOP 25 14
Slide 15: 8 Strategic Acquisitions in 2022
Closed Description 3/11 Multicultural full-service marketing agency Provider of scaled commerce and marketplace solutions for A STRONG 4/20 150+ global brands and 500+ e-retailers worldwide YEAR FOR M&A: 5/15 Direct response firm in the political data and marketing arena 8 Strategic Acquisitions A r
Slide 16: We Have Our Financial House in Order
Refinanced Bonds, Securing $1.1BN in financing › Fixed interest rate of 5.625% WE HAVE in rising interest rate environment OUR FINANCIAL › ~7 years to maturity in 2029, HOUSE providing financial flexibility in order Secured $500M Revolving Credit Facility with flexible terms, 5-year maturity Moody’s
Slide 17: Liquidity
LIQUIDITY $ in Millions Available Liquidity (as of 12/31/22) Commitment Under Credit Facility $ 500 Drawn 100 Undrawn Letters of Credit 25 Undrawn Commitments Under Facility $ 375 Total Cash & Cash Equivalents 221 Total Available Liquidity $ 596 17
Slide 18: Maintaining Discipline Around Deferred Acquisition Costs
MAINTAINING DISCIPLINE AROUND Deferred Acquisition Costs REDUCED DAC BY $61M FROM 2021 YEAR-END BALANCE $222M $161M Q421 Q422 18
Slide 19: Adjusted Earnings Per Share
ADJUSTED EARNINGS PER SHARE Three Months Ended December 31, 2022 Twelve Months Ended December 31, 2022 Reported Reported Adjustments Non-GAAP Adjustments Non-GAAP $ and Shares in Thousands (GAAP) (GAAP) Net income attributable to Stagwell Inc. common shareholders $ (6,478) $ 42,485 $ 36,007 $ 27,269
Slide 20: GAAP Consolidated Operating Performance
GAAP CONSOLIDATED OPERATING PERFORMANCE Three Months Ended December 31, Twelve Months Ended December 31, $ and Shares in Thousands 2022 2021 2022 2021 Revenue $ 708,185 $ 611,927 $ 2,687,792 $ 1,469,363 Cost of services 419,811 348,000 1,673,576 906,856 Office & general expenses 172,415 197,318 601,
Slide 21: Pro Forma Capital Structure
PRO FORMA CAPITAL STRUCTURE Net Debt & Debt-Like ($M, as of 12/31/22) Pro Forma Share Count (Thousands, as of 2/28/23) Revolving Credit Facility $ 100 Class A4 131,614 Bonds 1,100 NCI1 34 DAC 161 Class C5 160,909 (equal voting & economic rights to Class A) RNCI2 60 Less: Investments3 18 Share-based
Slide 22: Stagwell Marketing Cloud: Next Wave of Technology
STAGWELL MARKETING CLOUD Next Wave of Technology AUGMENTED REALITY FOR SPORTS GENERATIVE AI FOR COMMS Shared AR product ARound is bringing Comms Tech AI product PRophet is launching premium and interactive brand-sponsored AR experiences generative AI for pitches, press releases, and social posts to
Slide 23: Product Spotlight: Augmented Reality
AUGMENTED REALITY Product Spotlight THE NEXT GENERATION OF STADIUM ENTERTAINMENT AND FAN ENGAGEMENT ARound is a category creator, bringing a whole new level of fan engagement to the sports and entertainment world with shared augmented reality. By 3D mapping stadiums and delivering localized, interac
Slide 24: Product Spotlight: Generative AI
GENERATIVE AI Product Spotlight GENERATIVE AI FOR PITCHES, PRESS RELEASES AND SOCIAL POSTS PRophet is the first-ever generative and predictive AI SaaS platform designed by and for the PR community. The platform uses AI to help modern PR professionals become more performative, productive and predicti
Slide 25: Thank You
Thank You Contact Us: IR@StagwellGlobal.com