Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — FY2020 Earnings Presentation
27 slides from Stagwell's earnings presentation, Mar 2, 2021
Slide 1: Management Presentation Fourth Quarter & Full Year 2020 Results
Management Presentation Fourth Quarter & Full Year 2020 Results March 2, 2021
Slide 2: Forward Looking Statements & Other Information
2 This presentation contains forward-looking statements. Statements in this presentation that are not historical facts, including without limitation the information under the heading "Financial Outlook" and statements about the Company’s beliefs and expectations, earnings (loss) guidance, recent bus
Slide 3: Forward Looking Statements & Other Information (Cont.)
3 • the Company’s ability to achieve the full amount of its stated cost saving initiatives; • the Company’s implementation of strategic initiatives; • the Company’s ability to remain in compliance with its debt agreements and the Company’s ability to finance its contingent payment obligations when d
Slide 4: Summary
4 • Sequential revenue growth of 15.8% from the third quarter of 2020 • Organic revenue decline of 13.7% in the fourth quarter and 13.9% YTD, driven by lower spending by clients in connection with the COVID-19 pandemic • Adjusted EBITDA Margin in 2020 was 14.8%, vs. 12.3% in the prior year, an incre
Slide 5: Fourth Quarter 2020 Financial Highlights
5 • Revenue of $328.2 million versus $382.0 million in the prior year period • Sequential revenue growth of 15.8% from the third quarter of 2020 • Organic revenue decreased by 13.7% versus the prior year period. Organic revenue was unfavorably impacted by 63 basis points from billable pass through c
Slide 6: Twelve Months 2020 Financial Highlights
6 • Revenue of $1.20 billion versus $1.42 billion for the prior year period • Organic revenue decreased by 13.9% versus the prior year period. Organic revenue was unfavorably impacted by 162 basis points from billable pass through costs • Adjusted EBITDA of $177.3 million versus $174.2 million for t
Slide 7: Consolidated Statements of Operations
7 (US$ in millions, except percentages) Three Months Ended December 31, Twelve Months Ended December 31, 2020 2019 % Change 2020 2019 % Change Revenue: $ 328.2 $ 382.0 (14.1) % $ 1,199.0 $ 1,415.8 (15.3) % Operating Expenses: Cost of services sold 209.0 260.7 (19.8) % 769.9 961.1 (19.9) % Office and
Slide 8: Revenue Summary
8 Organic revenue declined 13.7% in the fourth quarter and 13.9% YTD versus the prior year period. (US$ in millions, except percentages) Three Months Ended Twelve Months Ended Revenue $ % Change Revenue $ % Change December 31, 2019 $ 382.0 $ 1,415.8 Organic revenue (52.2) (13.7) % (197.5) (13.9) % N
Slide 9: Revenue by Geography and Segment 2020
9 REVENUE BY GEOGRAPHY AND SEGMENT (1) (US$ in millions, except percentages) 2020 Q1 Q2 Q3 Q4 Total Total Organic Revenue Total Total Organic Revenue Total Total Organic Revenue Total Total Organic Revenue Revenue Growth Growth (Decline) Revenue Growth Growth (Decline) Revenue Growth Growth (Decline
Slide 10: Revenue by Geography and Segment 2019
10 REVENUE BY GEOGRAPHY AND SEGMENT (1) (US$ in millions, except percentages) 2019 Q1 Q2 Q3 Q4 Total Total Organic Revenue Total Total Organic Revenue Total Total Organic Revenue Total Total Organic Revenue Revenue Growth Growth (Decline) Revenue Growth Growth (Decline) Revenue Growth Growth (Declin
Slide 11: Revenue by Geography and Segment: Three Months Ended December 31
11 (US$ in millions, except percentages) Three Months Ended December 31 2020 2019 Total Total Organic Revenue Total Total Organic Revenue Revenue Growth Growth (Decline) Revenue Growth Growth (Decline) United States $ 256.5 (13.6) % (12.1) % $ 296.7 (2.4) % (2.4) % Canada 26.8 (17.0) % (18.4) % 32.2
Slide 12: Revenue by Geography and Segment: Twelve Months Ended December 31
12 (US$ in millions, except percentages) Twelve Months Ended December 31, 2020 2019 Total Total Organic Revenue Total Total Organic Revenue Revenue Growth Growth (Decline) Revenue Growth Growth (Decline) United States $ 959.6 (14.0) % (12.7) % $ 1,116.0 (3.2) % (4.1) % Canada 81.9 (22.0) % (17.9) %
Slide 13: Revenue by Client Industry
13 Top 10 clients made up 21.0% of revenue in 2020, a decrease from 23.4% in 2019. (Largest < 3.6%) REVENUE BY CLIENT INDUSTRY Q4 2020 QTD 2020 YTD Above 10% Consumer Products - 0% to 10% Retail, Healthcare Healthcare Below 0% Automotive, Technology, Food and Beverage, Communications, Financials, Tr
Slide 14: Adjusted EBITDA: Quarterly
14 ADJUSTED EBITDA (1) (US$ in millions, except percentages) % Change 2019 2020 Q4 2020 vs. Q4 2019 Q4 Q1 Q2 Q3 Q4 Integrated Networks - Group A 31.7 16.3 17.2 21.0 25.3 (20.2) % Integrated Networks - Group B 19.5 17.1 16.4 29.6 21.2 8.7 % Media & Data Network 5.4 1.8 0.9 3.0 4.0 (25.9) % All Other
Slide 15: Adjusted EBITDA: Twelve Months
15 ADJUSTED EBITDA (1) (US$ in millions, except percentages) Twelve Months Ended December 31, 2020 2019 % Change Integrated Networks - Group A 79.8 74.8 6.7 % Integrated Networks - Group B 84.3 84.6 (0.4) % Media & Data Network 9.7 7.7 26.0 % All Other 30.8 37.6 (18.1) % Corporate Group (27.2) (30.6
Slide 16: Covenant EBITDA 2020
16 COVENANT EBITDA 2020 Covenant EBITDA (LTM) (1) (US$ in millions) Q1 Q2 Q3 Q4 Q4-2020 - LTM Net income (loss) attributable to MDC Partners Inc. common shareholders $ (2.4) $ (4.1) $ 0.4 $ (237.1) $ (243.3) Adjustments to reconcile to operating income (loss): Accretion on and net income allocated t
Slide 17: Covenant EBITDA 2019
17 COVENANT EBITDA 2019 Covenant EBITDA (LTM) (1) (US$ in millions) Q1 Q2 Q3 Q4 Q4-2019 - LTM Net income (loss) attributable to MDC Partners Inc. common shareholders $ (2.5) $ 1.0 $ (5.1) $ (11.1) $ (17.6) Adjustments to reconcile to operating income: Accretion on and net income allocated to convert
Slide 18: Summary of Cash Flow
18 SUMMARY OF CASH FLOW (US$ in millions) Twelve Months Ended December 31, 2020 2019 Net cash provided by operating activities $ 32.6 $ 86.5 Net cash provided by (used in) investing activities (8.3) 0.1 Net cash used in financing activities (73.4) (11.7) Effect of exchange rate changes on cash, cash
Slide 19: 2021 Financial Outlook
19 2021 FINANCIAL OUTLOOK 2020 Outlook Commentary* Organic Revenue Growth We expect approximately 7 to 9% growth in organic revenue. Foreign Exchange Impact, net No estimated impact at this time. Impact of Non-GAAP Acquisitions (Dispositions), net Our current expectations are that the impact of acqu
Slide 20: Appendix
20 APPENDIX
Slide 21: Revenue Trending Schedule
21 REVENUE TRENDING SCHEDULE Note: See appendix - "Definitions of Non-GAAP Financial Measures". Note: Actuals may not foot due to rounding (US$ in thousands, except percentages) 2018 2019 2020 Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD Revenue United States $ 256,524 $ 295,268 $ 296,544 $ 304,0
Slide 22: Adjusted EBITDA Trending Schedule
22 ADJUSTED EBITDA TRENDING SCHEDULE (US$ in thousands, except percentages) 2018 2019 2020 Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD PARTNER FIRMS Revenue $326,968 $379,743 $375,830 $392,547 $1,475,088 $328,791 $362,130 $342,907 $381,975 $1,415,803 $327,742 $259,678 $283,423 $328,168 $1,199,01
Slide 23: Reconciliations
23 RECONCILIATIONS 2019 2020 Q1 Q2 Q3 Q4 YTD Q1 Q2 Q3 Q4 YTD NON-GAAP ACQUISITIONS (DISPOSITIONS), NET GAAP revenue from current year acquisitions $ — $ 698 $ 1,347 $ 1,396 $ 3,441 $ — $ — $ — $ — $ — GAAP revenue from prior year acquisitions (1) 15,685 1,519 1,109 291 18,604 — — — — — Foreign excha
Slide 24: Available Liquidity
24 AVAILABLE LIQUIDITY (US$ in millions) December 31, 2020 December 31, 2019 Commitment Under Facility $ 211.5 $ 250.0 Drawn — — Undrawn Letters of Credit 18.7 4.8 Undrawn Commitments Under Facility(1) $ 192.8 $ 245.2 Total Cash & Cash Equivalents 60.8 106.9 Liquidity $ 253.6 $ 352.1 (1) Subject to
Slide 25: Current Credit Picture
25 CURRENT CREDIT PICTURE Current Debt Maturity Profile (5)$211.5 million Credit Facility Covenants (1) (US$ in millions) December 31, 2020 Covenants I. Total Senior Leverage Ratio (0.02) Maximum per covenant 2.00 II. Total Leverage Ratio 4.42 Maximum per covenant 6.25 III. Fixed Charges Ratio 2.52
Slide 26: Definition of Non-GAAP Financial Measures
26 DEFINITION OF NON-GAAP FINANCIAL MEASURES In addition to its reported results, MDC Partners has included in its earnings release and supplemental management presentation certain financial results that the Securities and Exchange Commission defines as "non-GAAP financial measures." Management beli
Slide 27: MDC Partners contact details
MDC Partners One World Trade Center, Floor 65 New York, NY 10007 646-429-1800 www.mdc-partners.com