Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — UBS Global Media and Communications Conference 2009
24 slides from Stagwell's conference presentation, Dec 14, 2009
Slide 1: Where Great Talent Lives
MDC() PARTNERS Where Great Talent Lives UBS Global Media and Communications Conference December 9, 2009 (Nasdaq: MDCA / TSX: MDZ.A)
Slide 2: Forward Looking Statements & Other Information
MDC(K)PARTNERS Forward Looking Statements & Other Information ‘This presentation 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 historical facts, including statements
Slide 3: Business Overview
MDC(X)PARTNERS Business Overview
Slide 4: MDC Partners is a Global Marketing Services Network
MDC Partners is a Global Marketing Services Network Built for Growth > 9th largest marketing services firm in the world with offices in the US, Canada and Europe and over 5,000 employees > Network of 30+ agencies that provide advertising and performance marketing services to Fortune 100 companies >
Slide 5: New Business Segment Reporting
New Business Segment Reporting Py MDC Partners will now report its results through two business segments: Strategic Marketing Services Group Performance Marketing Services Group > 67% of YTD Revenue | + 33% of YTD Revenue Z > Integrated marketing and : > Firms that use data analytics, communication
Slide 6: Shift from traditional model to hybrid traditional/microsite model
)>h"?} PARTNERS We have shifted from a traditional model driven by reach and frequency to a hybrid traditional/microsite model driving consumers to one primary point with an objective of increasing the financial return on consumer engagements... Nec = (-)—)— GJ ey OS 8 Source: souinsrenauwcras
Slide 7: Moving to a fully integrated, addressable, digital ecosystem
...And are moving to a fully integrated, addressable, f digital ecosystem creating data at every intersection * XS / 8 Source: souinsrenauwcras
Slide 8: Our Business Strategy Embraces this New World
MDC(X)PARTNERS Our Business Strategy Embraces this New World % > Nimble, media-agnostic approach allows agencies to produce better results for their clients > Focused on driving digital and interactive services Old Agency Model New Agency Model > _ Silos for each media, each with a separate P&L > Of
Slide 9: MDC Partners Mix vs. Industry - Today and the Future
MDC Partners Mix vs. Industry — _ Today and the Future & Industry Mix Digital 12% Other Non- Traditional’ 41% Advertising 47% MDC Mix - Today MDC Mix - Future Digital Other Non- 31% (Other Non: i! Traditional’ Traditional’ a 35% 40% Advertising Advertising 29% 25% ‘Source: Company management, Advert
Slide 10: Why Consumer Insights Matter
MDC(()PARTNERS Why Consumer Insights Matter
Slide 11: The Marketer's Dilemma
MDC(K)PARTNERS The Marketer’s Dilemma * Finding the next big idea or creative break-through was difficult enough before the marketer's ecosystem became so fragmented and highly interconnected Now marketers’ to do list also includes: > Do something with the abundant data that is created > Talk to eac
Slide 12: The Next Generation CMO
The Next Generation CMO ue “We believe that the next generation CMO will come from the Customer Intelligence discipline. That’s not to say CMOs won't continue to care deeply about the brand, and the emotional connection that they create with their customers. But, as they struggle to engage with empo
Slide 13: Analytical left brain must inform creativity and big ideas
The analytical left brain must fully inform the creativity and big ideas born of the right brain to deliver superior Return on Marketing Investment” Creativity Insights Our Performance Marketing companies use research, data mining, data analytics, and database marketing to improve Return on Marketin
Slide 14: Communifx Adds Scale to Our Performance Marketing
pe) Communifx Adds Scale to Our Performance Marketing > We have entered into an agreement to acquire 75% of Communifx > ‘Customer Engagement Agency’ — Leverages data analytics to drive ongoing on- and off-line customer acquisition, loyalty and retention programs — Combines strategy with execution le
Slide 15: Financial Review
MDC(K)PARTNERS Financial Review
Slide 16: Track Record of Strong Revenue and EBITDA Growth
MDC(X)PARTNERS { Track Record of Strong Revenue and EBITDA Growth uy $US Millions Revenue EBITDA 2004 2008 ©=« 2006 «2007-2008» 2009E Source: Company management ‘Note: 2004-2006 results have been adjusted for discontinued operations. 16
Slide 17: Market Leading Organic Revenue Growth
>) PARTNERS Market Leading Organic Revenue Growth ue 25% 22.5% 20% 15% 12.1% 10% | 1% 84% 8.4% 9% 5.3% 5% om 3.1% 27% 2% Revenue Growth 0% 5% (8.7%) -10% (9.2%) 48 (12.6%) 2005 2008 2007 2008 YTD 2009 mMDC 1m Peers - NA Only (OMC, IPG, WPP, PUB) industry Avg - NA Only ‘Souroe: Company flings. Zenith
Slide 18: Portfolio of World Class, Fortune Clients in Diversified Industries
>} PARTNER Portfolio of World Class, Fortune 100 Clients in Diversified Industries Fa Communications / Consumer Products Media Retailers | Manufacturing Technology Automotive _ Financials Other t— sprint DIAGEO Microsoft HSBC € th wovarris = Us al Kao & S B~-~ Significant opportunity to increase sha
Slide 19: Free Cash Flow and EBITDA
$US Millions $70 5 $60 4 $50 4 2005 2006 2007 2008 2009E mm FCF mam EBITDA —eFCF/EBIMDA ‘Source: Company management "Note: 2008 — 2006 results have been adjusted for discontinued operations. 2009 FCF / EBITDA based on mid-point of quidance for llustrative purposes. 19
Slide 20: Liquidity is Strong, Allowing MDC to Optimize Shareholder Value
*?Y)PARTNERS Liquidity is Strong, Allowing MDC to Optimize Shareholder Value > MDC’s balance sheet and financial strength is at an all-time high - $138 million of liquidity and no maturities for 7 years — Cash of $67 million’ — Undrawn $75 million credit facility > FCF of $39 - $40 million estimated
Slide 21: Accelerating EPS Growth in 2010 and Beyond
MDC(K)PARTNERS Accelerating EPS Growth in 2010 and Beyond Pd > Several factors will lead to positive EPS in 2010 and beyond: é — Growing EBITDA — Reduction of Amortization of Intangibles — Reduction of Depreciation 21
Slide 22: 2009 Financial Outlook
MDC(K)PARTNERS 2009 Financial Outlook ue? Implied Current Year over Year Guidance Change Revenue $545 - $575 million (6.8%) to (1.7%) EBITDA $63 - $65 million 3.3% to 6.6% Free Cash Flow * $39 - $40 million 18.5% 0 21.6% + Estimated Impact from Change in Working Capital $15 - $20 million Total Free
Slide 23: ARTNERS
ARTNERS > MDC Partners is well positioned for an improving economic and advertising outlook — Best in breed performance during the downturn with increasing profitability and Free Cash Flow throughout 2009 > Will benefit significantly from the movement of clients to media- agnostic, performance-based
Slide 24: Where Great Talent Lives
MDC() PARTNERS Where Great Talent Lives UBS Global Media and Communications Conference December 9, 2009 (Nasdaq: MDCA / TSX: MDZ.A)
MDC Partners — UBS Global Media and Communications Conference 2009 on 6ix