Slide 1: Management Presentation Fourth Quarter 2016 Results
February 27, 2017 Management Presentation Fourth Quarter 2016 Results
Slide 2: Forward Looking Statements & Other Information
2 FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation, including our “ 2017 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 histor
Slide 3: Fourth Quarter 2016 Summary
3 FOURTH QUARTER 2016 SUMMARY » Solid finish to 2016, due to improved top line momentum across the portfolio and execution on planned cost actions to re - align cost base » Top line momentum returning to the business, consisting of better - than - expected +8.8% revenue growth, +3.8% organic revenue
Slide 4: Fourth Quarter 2016 Financial Highlights
4 » Revenue increased 8.8% to $390.4 million from $359.0 million » Organic revenue growth of 3.8%, after a 75 basis points benefit from increased billable pass - through costs » Net income attributable to MDC Partners of $7.7 million versus a loss of ($26.2) million last year, including a non - cash
Slide 5: Full Year Financial Highlights
5 » Revenue increased 4.5% to $1.39 billion from $1.33 billion » Organic revenue growth of 2.3%, after approximately 30 basis points reduction from decreased billable pass - through costs » Net loss attributable to MDC Partners of ($47.9) million versus ($37.4) million last year, including a non - c
Slide 6: Consolidated Revenue and Earnings
6 CONSOLIDATED REVENUE AND EARNINGS Note: Actuals may not foot due to rounding (US$ in millions, except percentages) 2016 2015 2016 2015 Revenue 390.4$ 359.0$ 8.8 % 1,385.8$ 1,326.3$ 4.5 % Operating Expenses Cost of services sold 260.2 231.3 12.5 % 936.1 879.7 6.4 % Office and general expenses 72.4
Slide 7: Revenue Summary
7 » Organic revenue growth of 3.8% in Q4 and 2.3% for the full year REVENUE SUMMARY 1 Non - GAAP Acquisitions (Dispositions), net consists of $22.7 million of Acquisitions and $0.5 million of Dispositions for the thr ee months ended December 31, 2016, and $42.5 million of Acquisitions and $0.5 milli
Slide 8: Revenue by Geography and Segment
8 REVENUE BY GEOGRAPHY AND SEGMENT » U.S. acceleration to +4.3% in Q4 2016 due to improved trends across major disciplines, driven by increased spend from existing clients and contribution from new business, partially offset by impact of prior client losses The Reportable segment is comprised of our
Slide 9: Revenue by Client Industry
9 Year - over - Year Growth by Category » Best performing sectors: Communications, Food & Beverage, Automotive » Diversification continues: Top 10 clients declined to 22.7% of revenue in Q4 2016 versus 24.3% a year ago (largest <4%) REVENUE BY CLIENT INDUSTRY Q4 2016 2016 Above 10% Communications, F
Slide 10: Adjusted EBITDA
10 » Decline in Adjusted EBITDA in Q4 reflects a $6 million decrease in distributions from non - consolidated affiliates (flows through Corporate Group), and cost initiatives ADJUSTED EBITDA 1 Adjusted EBITDA is a non GAAP measure. See schedules 2 through 5 of the Q4 2016 press release for a reconci
Slide 11: Adjusted EBITDA Available for General Capital Purposes
11 ADJUSTED EBITDA AVAILABLE FOR GENERAL CAPITAL PURPOSES 1 Adjusted EBITDA is a non GAAP measure. See schedules 2 through 5 of the Q4 2016 press release for a reconciliation of Net los s t o Adjusted EBITDA. 2 Capital Expenditures, net represents capital expenditures net of landlord reimbursements.
Slide 12: Summary of Cash Flow
12 SUMMARY OF CASH FLOW Note: Actuals may not foot due to rounding (US$ in millions) 2016 2015 Cash flows provided by continuing operating activities $5.4 $164.1 Discontinued operations 0.0 (1.3) Net cash provided by operating activities $5.4 $162.8 Cash flows used in continuing investing activities
Slide 13: Financial Outlook
13 FINANCIAL OUTLOOK Organic Revenue Adjusted EBITDA Margin approximately 4% growth approximately 100 basis points increase 2017 Guidance Note: The Company has excluded a quantitative reconciliation with respect to the Company's 2017 guidance under the "unreasonable efforts" exception in item 10(e)(
Slide 14: Appendix
14 APPENDIX
Slide 15: Revenue Trending Schedule
15 REVENUE TRENDING SCHEDULE Note: Actuals may not foot due to rounding (US$ in thousands, except percentages) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Revenue United States $228,833 $243,128 $249,128 $272,385 $993,474 $252,018 $271,375 $270,512 $291,147 $1,085,051 $252,199 $272,992 $274,506 $30
Slide 16: Adjusted EBITDA Trending Schedule
16 ADJUSTED EBITDA TRENDING SCHEDULE Note: Actuals may not foot due to rounding (US$ in thousands, except percentages) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY ADVERTISING AND COMMUNICATIONS GROUP Revenue $302,222 $336,606 $328,415 $359,013 $1,326,256 $309,042 $337,047 $349,254 $390,442 $1,385,785 Operating pr
Slide 17: Adjusted EBITDA Trending Schedule (cont.)
17 ADJUSTED EBITDA TRENDING SCHEDULE (cont.) Note: Actuals may not foot due to rounding (US$ in thousands, except percentages) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY CORPORATE GROUP Revenue $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Operating loss (20,818) (9,890) (19,801) (14,663) (65,172) (13,130) (12,801) (7,051) (11,
Slide 18: Acquisition Revenue Detail
18 ACQUISITION REVENUE DETAIL (1) For the year ended December 31, 2015, revenue from acquisitions was comprised of $32.0 million from 2014 acquisitions and $13 .8 million from 2015 acquisitions. For the three months ended December 31, 2016, 2016 revenue from acquisitions was comprised of $0.6 millio
Slide 19: Reconciliations
19 RECONCILIATIONS (US$ in millions) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Other items, net SEC investigation and class action litigation expenses 5,762$ 3,882$ 2,722$ 1,340$ 13,706$ 1,486$ 1,359$ 767$ 454$ 4,066$ SEC final settlement payment - - - - - - - - 1,500 1,500 D&O insurance proceeds - - - (1,000)
Slide 20: Available Liquidity
20 AVAILABLE LIQUIDITY 1 1 Subject to available borrowings under the Credit Facility. Note: Actuals may not foot due to rounding (US$ in millions) December 31, 2016 December 31, 2015 Commitment Under Facility $325.0 $325.0 Drawn 54.4 - Undrawn Letters of Credit 4.4 5.0 Undrawn Commitments Under Faci
Slide 21: Current Credit Picture
21 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, proforma adjustments for acquisitio
Slide 22: Temporal Put Obligations and Impact on EBITDA
22 TEMPORAL PUT OBLIGATIONS AND IMPACT ON EBITDA 1 This amount is in addition to ( i ) $43.1 million of options to purchase only exercisable upon termination not within the control of the Company, or death, and (i i) the excess of the initial redemption value recorded in Redeemable Noncontrolling In
Slide 23: Definition of Non-GAAP Measures
23 DEFINITION OF NON - GAAP MEASURES Organic Revenue: “Organic revenue growth” and “organic revenue decline” refer to the positive or negative results, respectively, of subtracting both the foreign exchange and acquisition (disposition) components from total revenue growth. The acquisition (disposit
Slide 24: MDC Partners contact details
MDC Partners Innovation Center 745 Fifth Avenue, Floor 19 New York, NY 10151 646 - 429 - 1800 www.mdc - partners.com