Slide 1: Second Quarter 2023 Earnings Presentation
Second Quarter 2023 EARNINGS PRESENTATION AUGUST 8 | 2023
Slide 2: Forward-looking statements
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 representatives may also make forward-looking
Slide 3: Definitions of Non-GAAP Financial Measures
DEFINITIONS OF NON-GAAP FINANCIAL MEASURES 3 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 fina
Slide 4: Financial Outlook: Adjusting Full-Year 2023 Outlook
4 FINANCIAL Outlook Adjusting Full-Year 2023 Outlook 0.0 – 2.0% Organic Net Revenue Growth $410M - $440M In Adjusted EBITDA 50 - 60% EBITDA Conversion on Free Cash Flow $0.76 - $0.85 In Adjusted Earnings Per Share Note: Guidance as of 8/08/2023. The Company has excluded a quantitative reconciliation
Slide 5: Second Quarter Highlights
S E C O N D Q U A R T E R H I G H L I G H T S Growing INDUSTRY RECOGNITION Winning RECORD NEW BUSINESS Expanding TECHNOLOGY CAPES Managing COSTS Created and executed SPORT BEACH, transformative Cannes Lions experience 38 athletes, 23 partners and 17 agencies convened to talk about the future of spor
Slide 6: Summary Combined Financials
S U M M A R Y C O M B I N E D F I N A N C I A L S Note: Figures may not foot due to rounding. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net Revenue $ 539,060 $ 556,316 $ 1,060,722 $ 1,082,953 Billable Costs 93,205 116,597 193,987 232,863 Revenue $ 632,265 $ 672,913 $
Slide 7: Q2 Net Revenue
2 Q 2 3 N E T R E V E N U E Note: Figures may not foot due to rounding. Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 Net Revenue Change Net Revenue Change June 30, 2022 $ 556,316 $ 1,082,953 Organic revenue (29,305) (5.3%) (45,433) (4.2%) Acquisitions (divestitures), net 16,274 2.
Slide 8: Q2 Net Revenue by Geography
78.5% 8.5% 13.0% 2 Q N E T R E V E N U E B Y G E O G R A P H Y Note: Figures may not foot due to rounding. 2Q Organic Growth Y/Y Geography 2Q23 YTD United States (8.0)% (6.5)% United Kingdom 8.6% 10.4% Other 4.8% 2.9% TOTAL (5.3)% (4.2)% TOTAL EX-ADVOCACY (4.5)% (2.8)% 8 % OF NET REVENUE
Slide 9: Global Network
G L O B A L N E T W O R K 9 North America Latin America Europe Asia Pacific • Australia • China • Hong Kong • India • Indonesia • Japan • Malaysia • Philippines • Taiwan • Thailand • Singapore • South Korea Middle East & Africa • Austria • Belgium • Bulgaria • Italy • Latvia • Romania • Slovak Repub
Slide 10: Our Principal Capabilities
O U R P R I N C I P A L C A P A B I L I T I E S Creativity & Communications Blue-Chip Customer Base Performance Media & Data Addressable on a Global Scale Consumer Insights & Strategy Tracking Across the Entire Consumer Journey Digital Transformation Building & Designing Digital Platforms & Technolo
Slide 11: Adjusted EBITDA Growth by Capability
A D J E B I T D A G R O W T H B Y C A P A B I L I T Y Note: Advocacy includes Targeted Victory, SKDK, and TMA Direct. Figures may not foot due to rounding. *EBITDA includes corporate expenses, notionally allocated ratably across each capability. Principal Capability 2Q23 YTD Digital Transformation (
Slide 12: Net Revenue Growth by Capability
N E T R E V E N U E G R O W T H B Y C A P A B I L I T Y Notes: Advocacy includes Targeted Victory, SKDK, and TMA Direct. Figures may not foot due to rounding. EBITDA includes corporate expenses, notionally allocated ratably across each capability. 2Q23 YTD Principal Capability Organic Net Revenue Gr
Slide 13: Q2 Ex-Advocacy Net Revenue & Adjusted EBITDA
Three Months Ended, Six Months Ended, June 30, 2023 June 30, 2022 % Change June 30, 2023 June 30, 2022 % Change Total Net Revenue $539 $556 (3.1%) $1061 $1083 (2.1%) Advocacy Net Revenue 36 41 (13.4%) 63 78 (19.5%) Total Ex Advocacy 503 515 (2.3%) 998 1005 (0.7%) Three Months Ended, Six Months Ended
Slide 14: New Business Update
N E W B U S I N E S S U P D A T E 14 PER CLIENT AT TOP 25 Notable Business WINS & EXPANSIONSNet New Business 2Q23 $75M LTM $256M Avg. Net Revenue 2Q23 $6.2M
Slide 15: Stagwell Marketing Cloud Group
S T A G W E L L M A R K E T I N G C L O U D G R O U P 15 $37M $48M 2Q22 2Q23 Net Revenue1 1. Defined as GAAP Revenue minus Billable Costs – Includes both the Advanced Media Platform and Stagwell Marketing Cloud groups Net Revenue Adj. EBITDA Margin Advanced Media Platforms $35.4 12.7% Stagwell Marke
Slide 16: Liquidity
16 LIQUIDITY Available Liquidity (as of 6/30/2023) Commitment Under Credit Facility $ 640 Drawn 402 Undrawn Letters of Credit 22 Undrawn Commitments Under Facility $ 216 Total Cash & Cash Equivalents 105 Total Available Liquidity $ 321 $ in Millions
Slide 17: Maintaining Discipline Around Deferred Acquisition Costs
17 MAINTAINING DISCIPLINE AROUND Deferred Acquisition Costs REDUCED DAC BY $83M FROM 2Q22 QUARTER-END BALANCE $197M $114M 2Q22 2Q23
Slide 18: Adjusted Earnings Per Share
A D J U S T E D E A R N I N G S P E R S H A R E Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 Reported (GAAP) Adjustments Non-GAAP Reported (GAAP) Adjustments Non-GAAP Net income attributable to Stagwell Inc. common shareholders (4,693) $ 23,635 $ 18,942 (4,250) $ 41,996 $ 37,746 N
Slide 19: GAAP Consolidated Operating Performance
G A A P C O N S O L I D A T E D O P E R A T I N G P E R F O R M A N C E Revenue Cost of services Office & general expenses Depreciation & amortization Impairment & other losses Total operating expenses Operating income (Loss) Interest expense, net Foreign exchange, net Other, net Other income (expen
Slide 20: Pro Forma Capital Structure
P R O F O R M A C A P I T A L S T R U C T U R E Note: Pro Forma share count assumes full conversion of Class C shares to Class A on a one-to-one basis. Numbers may not foot due to rounding 1. Excludes non-controlling interest of Stagwell Class C shareholders to reflect NCI balance pro forma for full
Slide 21: Stagwell Marketing Cloud Group
21 STAGWELL MARKETING CLOUD GROUP SaaS & DaaS tools for the in-house marketer SMC Real-Time Research SMC Comms Tech SMC Advanced Media Platforms SMC Media Studio SMC Data & AI Marketplace QR Code
Slide 22: Applying a Proven Playbook to Scale Stagwell Marketing Cloud Group
22 APPLYING A PROVEN PLAYBOOK to scale Stagwell Marketing Cloud Group Building complementary software solutions leveraging the domain expertise and distribution channels already in place at Stagwell SMC Advanced Media Platforms Proprietary & Premium Owned Media Channels SMC Media Studio Platform for
Slide 23: Product Incubation Playbook
23 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 STAGWELL MARKETING CLOUD GROUP Product Incubation Playbook WE BUILD ADVANCED PRODUCTS MORE EFFICIENTLY than the
Slide 24: Real-Time Insights Product Spotlight
24 REAL-TIME INSIGHTS Product Spotlight Customer Benefit Unlocking continuous brand tracking on an affordable, global, modern basis for research professionals
Slide 25: Artificial Intelligence Product Spotlight
25 ARTIFICAL INTELLIGENCE Product Spotlight Customer Benefit Revolutionizing the PR process through AI, saving PR professionals from millions of tedious working hours
Slide 26: Augmented Reality Product Spotlight
26 AUGMENTED REALITY Product Spotlight Customer Benefit Bringing a whole new level of stadium entertainment and fan engagement to sports and entertainment through shared AR
Slide 27: Stagwell Marketing Cloud Group Pricing Model
27 STAGWELL MARKETING CLOUD GROUP Pricing Model Modern, flexible pricing models that fit the needs and budgets for the modern, in-house marketer Subscription Pricing Annual SaaS contract Consumption Fee Data and media spend Advertising-Based Sponsorship fees
Slide 28: Thank You
Thank You Contact Us: IR@StagwellGlobal.com