Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — Q3 2019 Earnings Presentation
21 slides from Stagwell's earnings presentation, Nov 5, 2019
Slide 1: Management Presentation Third Quarter 2019 Results
November 5, 2019 Management Presentation Third Quarter 2019 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 statements about the Company’s beliefs and expectations, earnings guidance, recent business and econo
Slide 3: Summary
3 SUMMARY • Net new business of $30.5 million as agencies capitalized on the strengthening of MDC's pipeline • Aided by ongoing cost - reduction initiatives, MDC delivers year - over - year growth of 5.9% in 3Q 2019 YTD Adjusted EBITDA and 120 basis point improvement in Adjusted EBITDA Margin in YTD
Slide 4: Third Quarter 2019 Financial Highlights
4 ----- DRAFT ----- • Revenue of $342.9 million versus $375.8 million in the prior year period • Organic revenue declined by 7.5% versus the prior year period, including a 101 basis point benefit from billable pass through costs • Net loss attributable to MDC Partners Inc. common shareholders of $5.
Slide 5: Nine Months 2019 Financial Highlights
5 ----- DRAFT ----- • Revenue of $1.03 billion versus $1.08 billion for the prior year period • Organic revenue declined 3.7% versus the prior year period, including a 179 basis point benefit from billable pass through costs • Net loss attributable to MDC Partners Inc. common shareholders of $6.5 mi
Slide 6: Consolidated Revenue and Earnings
6 CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 % Change 2019 2018 % Change Revenue: $ 342.9 $ 375.8 (8.8 ) % $ 1,033.8 $ 1,082.5 (4.5 ) % Operating Expenses: Cost of services sold 222.4 238.7 (6.8 )
Slide 7: Revenue Summary
7 Organic revenue decline of 7.5% in the third quarter of 2019 versus the prior year period, including a 101 basis points benefit from increased billable pass - through costs incurred on clients’ behalf from certain of our partner firms acting as principal. REVENUE SUMMARY (US$ in millions, except p
Slide 8: Revenue by Geography and Segment
8 REVENUE BY GEOGRAPHY AND SEGMENT (1) 1 Due to changes in the composition of certain business and the Company’s internal management and reporting structure during 20 19, reportable segment results for the 2018 periods presented have been recast to reflect the reclassification of certain businesses
Slide 9: Revenue by Client Industry
9 Top 10 clients decreased to 23.2% of revenue versus 24.9% a year ago (largest <4.9%) REVENUE BY CLIENT INDUSTRY Q3 2019 QTD Q3 2019 YTD Above 10% _ Technology, Transportation 0% to 10% Communications, Technology, Transportation Consumer Products, Communications Below 0% Food and Beverage, Retail,
Slide 10: Adjusted EBITDA
10 ADJUSTED EBITDA (1) 1 Due to changes in the composition of certain business and the Company’s internal management and reporting structure during 20 19, reportable segment results for the 2018 periods presented have been recast to reflect the reclassification of certain businesses between segments
Slide 11: Covenant EBITDA
11 COVENANT EBITDA 2018 2019 Covenant EBITDA (LTM) (1) (US$ in millions) Q3 Q4 Q1 Q2 Q3 Q2 - 2019 - LTM Q3 - 2019 - LTM Net income (loss) attributable to MDC Partners Inc. common shareholders $ (18.2 ) $ (83.7 ) $ (2.5 ) $ 0.8 $ (5.1 ) $ (103.7 ) $ (90.5 ) Adjustments to reconcile to operating profi
Slide 12: Summary of Cash Flow
12 SUMMARY OF CASH FLOW (US$ in millions) Nine Months Ended September 30, 2019 2018 Net cash used in operating activities $ (5.8 ) $ (31.7 ) Net cash provided by (used in) investing activities 3.3 (48.4 ) Net cash provided by (used in) financing activities (2.2 ) 59.1 Effect of exchange rate changes
Slide 13: 2019 Financial Outlook
13 2019 FINANCIAL OUTLOOK Note: The Company has excluded a quantitative reconciliation with respect to the Company’s 2019 guidance under the “unreasona ble efforts” exception in Item 10(e)(1)(i)(B) of Regulation S - K. Note: See appendix for definitions of non - GAAP measures 2019 Outlook Commentary
Slide 14: Appendix
14 APPENDIX
Slide 15: Revenue Trending Schedule
15 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) 2017 (ASC 605) 2018 (ASC 606) 2019 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 YTD Revenue United States $ 274,682 $ 304,463 $ 289,701 $
Slide 16: Adjusted EBITDA Trending Schedule
16 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) 2017 (ASC 605) 2018 (ASC 606) 2019 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 YTD ADVERTISING AND COMMUNICAT
Slide 17: Reconciliations
17 RECONCILIATIONS (1) GAAP revenue from prior year acquisitions for 2019 and 2018 relates to acquisitions which occurred in 2018 and 2017, respecti ve ly. (2) Contributions to organic revenue growth (decline) represents the change in revenue, measured on a constant currency basis, re la tive to the
Slide 18: Available Liquidity
18 AVAILABLE LIQUIDITY 1 1 Subject to available borrowings under the Credit Facility. Note: Actuals may not foot due to rounding (US$ in millions) September 30, 2019 December 31, 2018 Commitment Under Facility $ 250.0 $ 325.0 Drawn 8.1 68.1 Undrawn Letters of Credit 4.7 4.7 Undrawn Commitments Under
Slide 19: Current Credit Picture
19 CURRENT CREDIT PICTURE 1 These ratios and measures are not based on generally accepted accounting principles and are not presented as alternatives mea sur es of operating performance or liquidity. Some of these ratios and measures include, among other things, pro forma adjustments for acquisition
Slide 20: Definition of Non-GAAP Measures
20 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 21: MDC Partners contact details
MDC Partners Innovation Center 745 Fifth Avenue, Floor 19 New York, NY 10151 646 - 429 - 1800 www.mdc - partners.com