Stagwell Inc. · NASDAQ:STGW
Stagwell — Q4 2023 Earnings Presentation
27 slides from Stagwell's earnings presentation, Feb 27, 2024
Slide 1: Fourth Quarter and Full Year 2023 Earnings Presentation
Fourth Quarter and Full Year 2023 EARNINGS PRESENTATION FEBRUARY 27 | 2024
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”). The Company’s
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 presentation certain financial results that the Securities and Exchange Commission (SEC) defines as "non-GAAP Financial Measures." Management believes that such non-GAAP financ
Slide 4: Full-Year 2024 Outlook
Full-Year 2024 Outlook 5% - 7% Organic Net Revenue Growth FINANCIAL Outlook 4% - 5% Organic Net Revenue Growth ex. Advocacy $400M - $450M Adjusted EBITDA ~ 50% EBITDA Conversion on Free Cash Flow $0.75 - $0.88 In Adjusted Earnings Per Share Note: Guidance as of 02/27/2024. The Company has excluded a
Slide 5: Full Year 2023 Highlights
FULL YEAR 2023 HIGHLIGHTS NET REVENUE: $2,147M | NET LEVERAGE RATIO: 2.89x | ADJ. EBITDA: $360M Growing CUSTOMER BASE Managing COSTS More than $270 million in net new business secured in FY23 Realized promised $30M of operational $65 million of net new business wins in Q423 efficiencies announced at
Slide 6: Summary Combined Financials
SUMMARY COMBINED FINANCIALS Three Months Ended Dec 31, Twelve Months Ended Dec 31, $ in Thousands 2023 2022 2023 2022 Net Revenue $ 551,066 $ 583,446 $ 2,146,652 $ 2,222,153 Billable Costs 103,829 124,739 380,525 465,639 Revenue $ 654,895 $ 708,185 $ 2,527,177 $ 2,687,792 Billable Costs 103,829 124,
Slide 7: 4Q23 Net Revenue
4Q23 NET REVENUE Three Months Ended Dec 31, 2023 Twelve Months Ended Dec 31, 2023 $ in Thousands Net Revenue Change Net Revenue Change Dec 31, 2022 $ 583,447 $ 2,222,153 Organic revenue (38,977) (6.7%) (130,667) (5.9%) Acquisitions 2,447 0.4% 57,107 2.6% (divestitures), net Foreign currency 4,149 0.
Slide 8: Net Revenue by Geography
NET REVENUE BY GEOGRAPHY % OF NET REVENUE Organic Growth Y/Y Geography 4Q23 FY23 4Q United States (7.8)% (7.6)% United Kingdom 13.9% 9.4% Other (10.5%) (2.2%) TOTAL (6.7)% (5.9)% TOTAL EX-ADVOCACY (5.4)% (4.4)% Note: Figures may not foot due to rounding. 8
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 1 Stagwell Marketing Cloud Group SaaS and DaaS Tools for the In-House Marketer 57% 4Q23 2 Digital Transformation Building & Designing Digital Platforms & Technology 3 Performance Media & Data Addressable on a Global Scale 4 Consumer Insights & Strategy Tracking Across the
Slide 11: Adj. EBITDA Growth by Capability
ADJ EBITDA GROWTH BY CAPABILITY Adj. EBITDA* Growth Y/Y % OF ADJ. EBITDA* Principal Capability 4Q23 YTD Stagwell Marketing Cloud Group (27.1)% 43.8% 10% 30% 4Q 31% Digital Transformation (21.2%) (41.9%) 7% Performance Media & Data (28.0%) (2.8%) 13% 46% 40% Consumer Insights & Strategy 1.2% (6.1%) C
Slide 12: Net Revenue Growth by Capability
NET REVENUE GROWTH BY CAPABILITY % OF NET REVENUE 4Q23 FY23 Principal Organic Net Net Organic Net Net Revenue Revenue Revenue Revenue Capability Growth Growth Growth Growth 9% Stagwell Marketing 10% (7.8%) (6.0%) 7.2% 31.4% 24% Cloud Group 4Q 24% Digital Transformation 14% (13.2%) (8.8%) (16.1%) (15
Slide 13: Ex-Advocacy Net Revenue & Adjusted EBITDA
EX-ADVOCACY NET REVENUE & ADJUSTED EBITDA $ in Millions Three Months Ended, Twelve Months Ended, Dec 31, Dec 31, Dec 31, Dec 31, % Change % Change 2023 2022 2023 2022 Total Net Revenue $551 $583 (5.5%) $2,147 $2,222 (3.4%) NET REVENUE Advocacy Net Revenue 42 53 (19.5%) 143 183 (21.8%) Total Ex Advoc
Slide 14: New Business Update
NEW BUSINESS UPDATE Notable Business WINS & EXPANSIONS Net New Business 4Q23 $65M LTM $271M Avg. Net Revenue 4Q23 $5.9M PER CLIENT AT TOP 25 14
Slide 15: Stagwell Marketing Cloud Group
STAGWELL MARKETING CLOUD GROUP Net Revenue1 Adj. Net EBITDA Revenue Margin Advanced $45.3 25.1% Media Platforms Stagwell $9.8 (22.8)% Marketing Cloud TOTAL $55.0 16.6% GROWTH (y/y) (6.0%) 1. Defined as GAAP Revenue minus Billable Costs – Includes both the Advanced Media Platform and Stagwell Marketi
Slide 16: Liquidity
LIQUIDITY $ in Millions Available Liquidity (as of 12/31/2023) Commitment Under Credit Facility $ 640 Drawn 59 Letters of Credit 16 Undrawn Commitments Under Facility $ 565 Total Cash & Cash Equivalents 120 Total Available Liquidity $ 685 Note: Numbers may not foot due to rounding. 16
Slide 17: Maintaining Discipline Around Deferred Acquisition Costs
MAINTAINING DISCIPLINE AROUND Deferred Acquisition Costs REDUCED DAC BY $60M FROM 4Q22 QUARTER-END BALANCE $161M $101M 4Q22 4Q23 Note: Numbers may not foot due to rounding. 17
Slide 18: Adjusted Earnings Per Share
ADJUSTED EARNINGS PER SHARE Three Months Ended Dec 31, 2023 Twelve Months Ended Dec 31, 2023 $ and Shares in Thousands Reported Reported (GAAP) Adjustments Non-GAAP (GAAP) Adjustments Non-GAAP Net income attributable to Stagwell Inc. common shareholders $ 127 $ (4,705) $ (4,578) $ 134 $ 52,712 $ 52,
Slide 19: GAAP Consolidated Operating Performance
GAAP CONSOLIDATED OPERATING PERFORMANCE Three Months Ended Dec 31, Twelve Months Ended Dec 31, $ and Shares in Thousands 2023 2022 2023 2022 Revenue $ 654,895 $ 708,185 $ 2,527,177 $ 2,687,792 Cost of services 419,865 419,811 1,621,174 1,673,576 Office & general expenses 179,871 172,415 661,250 601,
Slide 20: Capital Structure
CAPITAL STRUCTURE Net Debt & Debt-Like ($M, as of 12/31/2023) Share Count5 (Thousands, as of 2/22/2024) Revolving Credit Facility $ 59 Class A 117,579 Bonds 1,100 NCI1 32 DAC2 101 Class C 151,649 (equal voting & economic rights to Class A) RNCI3 31 Less: Investments4 22 Share-based awards6 5,936 Les
Slide 21: Stagwell Marketing Cloud SMC Product Spotlights
STAGWELL MARKETING CLOUD SMC PRODUCT SPOTLIGHTS SaaS & DaaS Tools For The In-House Marketer Augmented Building complementary software solutions leveraging the domain Reality expertise and distribution channels already in place at Stagwell Bringing a whole new level of stadium entertainment and fan e
Slide 22: Product Incubation Playbook
STAGWELL MARKETING CLOUD GROUP Product Incubation Playbook We've developed a proven strategy to develop and incubate new technologies, making informed product roadmap decisions based off agency clients while leveraging our world-class tech team Faster WE BUILD Shared infrastructure + tech expertise
Slide 23: Real-Time Insights Product Spotlight
REAL-TIME INSIGHTS Product Spotlight Customer Benefit Unlocking continuous brand tracking on an affordable, global, modern basis for research professionals 23
Slide 24: Artificial Intelligence Product Spotlight
ARTIFICAL INTELLIGENCE Product Spotlight Customer Benefit Revolutionizing the PR process through AI, saving PR professionals from millions of tedious working hours 24
Slide 25: Augmented Reality Product Spotlight
AUGMENTED REALITY Product Spotlight Customer Benefit Bringing a whole new level of stadium entertainment and fan engagement to sports and entertainment through shared AR 25
Slide 26: Pricing Model
STAGWELL MARKETING CLOUD GROUP Pricing Model Modern, flexible pricing models that fit the needs and budgets for the modern, in-house marketer Subscription Pricing Consumption Fee Advertising-Based Annual SaaS contract Data and media spend Sponsorship fees 26
Slide 27: Thank You
Thank You Contact Us: IR@StagwellGlobal.com