Slide 1: Management Presentation Third Quarter 2018 Results
Management Presentation Third Quarter 2018 Results October 29, 2018
Slide 2: Forward Looking Statements & Other Information
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 economic t
Slide 3: Summary
SUMMARY Revenue stabilized with improved organic revenue growth; Company expect to achieve positive organic revenue growth for remainder of 2018 Year-to-date Adjusted EBITDA impacted by the cost of implementing new accounting rules, as well as restructuring-related severance and real estate cons
Slide 4: Third Quarter 2018 Financial Highlights
THIRD QUARTER 2018 FINANCIAL HIGHLIGHTS Adopted ASC 606 effective January 1, 2018 using the Modified Retrospective Method, therefore reported results are not comparable with the prior period (which continues to be reported under ASC 605). See slide 6 for a reconciliation. Revenue of $375.8 milli
Slide 5: Nine Months 2018 Financial Highlights
NINE MONTHS 2018 FINANCIAL HIGHLIGHTS Adopted ASC 606 effective January 1, 2018 using the Modified Retrospective Method, therefore reported results are not comparable with the prior period (which continues to be reported under ASC 605). See slide 6 for a reconciliation. Revenue of $1.083 billion
Slide 6: Consolidated Revenue and Earnings
CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) Three Months Ended September 30, Nine Months Ended September 30, 2018 (1) 2017 % Change 2018 (1) 2017 % Change Revenue $ 375.8 $ 375.8 0.0 % $ 1,082.5 $ 1,111.0 (2.6) % Operating expenses Cost of services sold 238.7 249.4 (4.3)
Slide 7: Impact of Adoption of ASC 606 on Reported Results
IMPACT OF ADOPTION OF ASC 606 ON REPORTED RESULTS (US$ in millions, except percentages) Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Adjusted to Adjusted to Exclude Impact of Exclude Impact of As Reported Adjustments Adoption of ASC 606 As Reported Adjustments Adoption
Slide 8: Revenue Summary
REVENUE SUMMARY (US$ in millions, except percentages) Three Months Ended Nine Months Ended Revenue $ % Change Revenue $ % Change September 30, 2017 (ASC 605) $375.8 $1,111.0 Organic revenue growth 5.5 1.5% 2.2 0.2% Non-GAAP acquisitions (dispositions), net 6.8 1.8% 4.1 0.4% Foreign exchange impact,
Slide 9: Revenue by Geography and Segment
REVENUE BY GEOGRAPHY AND SEGMENT (US$ in millions, except percentages) Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 Total Total Organic Revenue Total Total Organic Revenue Revenue Growth Growth (Decline) Revenue Growth Growth (Decline) United States $296.5 2.4% 0.7% $84
Slide 10: Revenue by Client Industry
REVENUE BY CLIENT INDUSTRY Q3 2018 Mix Year-over-Year Growth by Category Other 9% Transportation and Food & Beverage Q3 2018 2018 YTD Travel/Lodging 22% 5% Above Transportation and Transportation and Automotive 6% 10% Travel/Lodging, Travel/Lodging, Financials, Communications, Healthcare Financials
Slide 11: Adjusted EBITDA
ADJUSTED EBITDA (US$ in millions, except percentages) Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 (ASC 606) (ASC 605) % Change (ASC 606) (ASC 605) % Change Advertising and Communications Group $ 68.2 $ 62.4 9.3 % $ 140.9 $ 161.7 (12.8) % Global Integrated Age
Slide 12: Summary of Cash Flow
SUMMARY OF CASH FLOW (US$ in millions) Nine Months Ended September 30, 2018 2017 Net cash used in operating activities ($31.7) ($14.5) Net cash used in investing activities (48.4) (19.5) Net cash provided by financing activities 59.1 24.9 Effect of exchange rate changes on cash and cash equivalents
Slide 13: 2018 Financial Outlook
2018 FINANCIAL OUTLOOK In an effort to increase our operating efficiency, profitability and cash generation in 2019 and beyond, we have accelerated actions to improve our cost structure. Although the ongoing cost savings arising from these actions are expected to improve our long-term financial po
Slide 14: Appendix
APPENDIX 13
Slide 15: Application of ASC 606
APPLICATION OF ASC 606 Adopted ASC 606 effective January 1, 2018 Only the accounting changes No change to our business model or performance metrics No change to our client relationships or underlying client contracts No change to cash or cash flow No change to 2018 Adjusted EBITDA dollar
Slide 16: Revenue Trending Schedule
REVENUE TRENDING SCHEDULE (US$ in thousands, except percentages) 2016 (ASC 605) 2017 (ASC 605) 2018 (ASC 606) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 YTD Revenue United States $252,199 $272,992 $274,506 $304,016 $1,103,712 $274,682 $304,463 $289,701 $303,517 $1,172,364 $256,524 $295,268 $296,544 $848
Slide 17: Adjusted EBITDA Trending Schedule
ADJUSTED EBITDA TRENDING SCHEDULE (US$ in thousands, except percentages) 2016 (ASC 605) 2017 (ASC 605) 2018 (ASC 606) Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 YTD ADVERTISING AND COMMUNICATIONS GROUP Revenue $309,042 $337,047 $349,254 $390,442 $1,385,785 $344,700 $390,532 $375,800 $402,747 $1,513,779
Slide 18: Reconciliations
RECONCILIATIONS (US$ in millions) 2016 2017 2018 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 YTD Non-GAAP acquisitions (dispositions), net GAAP revenue from current year acquisitions $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 11,066 $ 12,734 23,800 GAAP revenue from prior year acquisitions * 6,556 2,8
Slide 19: Available Liquidity
AVAILABLE LIQUIDITY1 (US$ in millions) September 30, 2018 December 31, 2017 Commitment Under Facility $325.0 $325.0 Drawn $ 103.0 $ - Undrawn Letters of Credit 5.2 5.1 Undrawn Commitments Under Facility $216.8 $319.9 Total Cash & Cash Equivalents 25.1 46.2 Liquidity $241.8 $366.1 1 Subject to availa
Slide 20: Current Credit Picture
CURRENT CREDIT PICTURE $325 million Credit Facility Covenants (1) Current Debt Maturity Profile (5) 2024 Seni or Notes $900 2021 Credi t Facility $103 2016 2017 2018 2019 2020 2021 2022 2023 2024 1 These ratios and measures are not based on generally accepted accounting principles and are not presen
Slide 21: Temporal Put Obligations and Impact on Adjusted EBITDA
TEMPORAL PUT OBLIGATIONS AND IMPACT ON ADJUSTED EBITDA Estimated Put Impact at September 30, 2018 Payment Consideration Incremental (US$ in millions) Cash Stock Total Income in Period 2018 $3.7 $0.0 $3.7 $2.4 2019 2.2 0.0 2.2 0.0 2020 3.2 0.1 3.3 1.6 2021 2.0 0.0 2.0 0.0 Thereafter 3.1 0.0 3.1 0.5 T
Slide 22: Definition of Non-GAAP Measures
DEFINITION OF NON-GAAP 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 believes that suc
Slide 23: MDC Partners Innovation Center, 745 Fifth Avenue, New York
MDC Partners Innovation Center 745 Fifth Avenue, Floor 19 New York, NY 10151 646-429-1800 www.mdc-partners.com