Slide 1: Management Presentation: Fourth Quarter and Full Year Results
Management Presentation February 21, 2013 Fourth Quarter and Full Year Results
Slide 2: Forward-looking statements
This presentation, including our “ 2013 Financial Outlook”, contains forward - looking statements . The Company’s representatives may also make forward - looking statements orally from time to time . Statements in this presentation that are not historical facts, including statements about the Compan
Slide 3: Summary
SUMMARY • 2012 was a record year for MDC • Our strategy of creating a truly transformational business where the most talented people in the industry are dedicated to enhancing the sustainable profitable growth of their clients is working • We are winning incremental share of wallet and market share
Slide 4: Key Financial Highlights
Key Financial Highlights Material Acceleration of Financial Performance Across All Metrics: Revenue, EBITDA, EBITDA Margins, Free Cash Flow & Net Debt - to - EBITDA Ratio • Organic revenue growth of 11.9% for Q4 2012 and 8.4% for FY 2012 • Q4 2012 revenue increased 16.0% to $294.6 million • FY 2012
Slide 5: Strong 2012 Results Across All Metrics
Strong 2012 Results Across All Metrics Implied Actual 2012 Year over Year 2012 Year over Year Guidance Change Actual Change Revenue $1,050 - $1,075 million +11.3% to +14.0% $1,070.7 million +13.9% EBITDA $110 - $115 million +21.2% to +26.7% $118.4 million +27.2% Free Cash Flow $35 - $40 million +50.
Slide 6: Consolidated Revenue and Earnings
CONSOLIDATED REVENUE AND EARNINGS Note: Actuals may not foot due to rounding (US$ in millions, except percentages) 2012 2011 2012 2011 Revenue 294.6$ 254.1$ 16.0 % 1,070.7$ 940.4$ 13.9 % Operating Expenses Cost of services sold 195.2 180.9 7.9 % 739.1 670.0 10.3 % Office and general expenses 96.3 66
Slide 7: Summary of Segment Results - Revenue
SUMMARY OF SEGMENT RESULTS - REVENUE • Strategic Marketing Services delivered 17.6% organic growth, an acceleration of 510 basis points from 3 Q 2012 • Strong new business wins in 2012 led to significant market share gains (US$ in millions, except percentages) 2012 2011 2012 2011 Revenue Strategic M
Slide 8: Fourth Quarter 2012 Revenue Growth by Segment
FOURTH QUARTER 2012 REVENUE GROWTH BY SEGMENT Strategic Performance Weighted Marketing Marketing Average Services Services Total Organic Growth 17.6% 1.2% 11.9% Acquisition Growth 3.3% 4.2% 3.6% Foreign Exchange Growth 0.4% 0.6% 0.5% Total 21.3% 6.0% 16.0%
Slide 9: Full Year 2012 Revenue Growth by Segment
FULL YEAR 2012 REVENUE GROWTH BY SEGMENT Strategic Performance Weighted Marketing Marketing Average Services Services Total Organic Growth 12.5% 0.7% 8.4% Acquisition Growth 6.4% 4.7% 5.8% Foreign Exchange Growth -0.3% -0.3% -0.3% Total 18.6% 5.1% 13.9%
Slide 10: Fourth Quarter Revenue by Client Sector
Retail 18% Other 12% Auto 6% Technology 8% Consumer Products 32% Healthcare 5% Financials 8% Communications 11% Retail 12% Other 13% Auto 4% Technology 4% Consumer Products 39% Healthcare 4% Financials 10% Communications 14% FOURTH QUARTER REVENUE BY CLIENT SECTOR Note: Actuals may not foot due to r
Slide 11: Full Year Revenue by Client Sector
Retail 14% Other 12% Auto 4% Technology 8% Consumer Products 35% Healthcare 4% Financials 10% Communications 13% Retail 17% Other 12% Auto 6% Technology 9% Consumer Products 31% Healthcare 5% Financials 8% Communications 12% FULL YEAR REVENUE BY CLIENT SECTOR Note: Actuals may not foot due to roundi
Slide 12: MDC Partners vs. Peers Trailing 12 Month Organic Revenue
-10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% MDC Partners vs. Peers Trailing 12 Month Organic Revenue MDC Peers Outperformance Despite More Difficult Comparisons Note: *Peers include Omnicom, Havas , and Publicis *Due to timing of earnings WPP and Interpublic are not included in 4 Q12 ORGANIC GROW
Slide 13: Summary of Segment Results - EBITDA
SUMMARY OF SEGMENT RESULTS - EBITDA Note: Actuals may not foot due to rounding (US$ in millions, except percentages) 2012 2011 2012 2011 EBITDA Strategic Marketing Services 38.9$ 19.6$ 98.6 % 108.0$ 74.6$ 44.9 % margin 19.4% 11.8% 15.0% 12.3% Performance Marketing Services 10.2 11.0 (6.8) % 31.2 36.
Slide 14: Free Cash Flow
FREE CASH FLOW Note: Actuals may not foot due to rounding (US$ in millions) 2012 2011 2012 2011 Cash Flow Provided by Continuing Operating Activities $60.1 $11.0 $78.2 $7.2 Distributions 0.7 0.5 1.3 1.1 Cash Taxes 0.3 0.1 1.2 0.2 Cash Interest, net 20.2 19.9 40.8 37.3 Changes in Working Capital (36.
Slide 15: Liquidity
LIQUIDITY *Note: At December 31, 2012, after giving effect to the limitations under the 11% Senior Notes indenture, approximately $85.0 million was available under the bank credit facility. (US$ in millions) Commitment Under Facility 150.0$ Drawn - Undrawn Letters of Credit 4.8 Funds Available Under
Slide 16: 2013 Financial Outlook
2013 FINANCIAL OUTLOOK Implied 2013 Year over Year Guidance Change Revenue $1,125 - $1,150 million +5.1% to +7.4% EBITDA $132 - $135 million +11.5% to +14.0% Free Cash Flow $55 - $60 million +10.8% to +20.9% Implied EBITDA Margin 11.7% +60 basis points Note: See appendix for definitions of non-GAAP
Slide 17: Appendix
APPENDIX
Slide 18: Temporal Put Obligations and Impact on EBITDA
TEMPORAL PUT OBLIGATIONS AND IMPACT ON EBITDA Note: Excludes put rights of $102.1 million exercisable pursuant to termination of employment or death. Incremental (US$ in millions) Cash Stock Total EBITDA in Period 2013 1.5 0.3 1.8 1.5 2014 1.4 0.5 1.9 0.2 2015 3.7 0.5 4.2 1.7 2016 2.6 0.1 2.7 0.0 Th
Slide 19: Summary of Cash Flow
SUMMARY OF CASH FLOW Note: Actuals may not foot due to rounding (US$ in millions) 2012 2011 Cash flows provided by (used in) continuing operating activities $78.2 $7.2 Discontinued operations (1.9) (2.7) Net cash provided by operating activities $76.3 $4.5 Cash flows provided by (used in) continuing
Slide 20: Definition of Non-GAAP Measures
DEFINITION OF NON - GAAP MEASURES • EBITDA: EBITDA is a non - GAAP measure, that represents operating profit plus depreciation and amortization, stock - based compensation, acquisition deal costs, deferred acquisition consideration adjustments and profit distributions from affiliates . • Organic Gro