Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — Q2 2010 Earnings Presentation
18 slides from Stagwell's earnings presentation, Jul 29, 2010
Slide 1: Management Presentation – Second Quarter 2010 Results
Management Presentation July 30, 2010 Second Quarter 2010 Results MDC(K)PARTNERS
Slide 2: Forward Looking Statements and Other Information
MDC(K)PARTNERS Forward Looking Statements and Other Information This presentation, including our “2010 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 a
Slide 3: Key Highlights
MDC(K)PARTNERS Key Highlights Solid first half 2010 financial and operational performance Improving business trends throughout 2Q give increased visibility to expected second half acceleration Revente increased to $170.0 million versus $134.9 million in Q2 2009, an inerease of 26,0% Organic revenue
Slide 4: Consolidated Revenue and Earnings
Consolidated Revenue and Earnings MDC(K)PARTNERS Amounts and percentages may not fot die 0 rounding USstunillas, cep pecans) ‘Three Months Ended June 30, Six Months Ended June 30, 2010 2009 % Change 2010 2009 Change Revenue $1700 $ 1349 260% $§ 3062 § 216 170 % Operating Expenses Cost of services so
Slide 5: Summary of Segment Results — Revenue
MDC(K)PARTNERS Summary of Segment Results — Revenue (US$, excep perentges) ‘Three Months Ended June 30, ‘Six Months Ended June 30, 2010 2009 % Change 2010 2009 % Change Revenue Strategic Marketing Services S$ 1070 $ 882 212% $ 1985 $ INT 149 9% Performance Marketing Services 63.0 46.6 35.1% 107.7 88
Slide 6: Second Quarter 2010 Revenue Growth by Segment
MDC(K)PARTNERS Second Qua 2010 Revenue Growth by Segment Strategic Performance Weighted Marketing ‘Marketing Average Acquisition Growth 4.1% 46.5% 18.8% Foreign Exchange Growth 1.6% 2.4% 1.9% Total 21.2% 35.1% 26.0% + 980 basis point acceleration of organic Strategic Marketing Services revenue growt
Slide 7: Year to Date Revenue Growth by Segment
MDC(K)PARTNERS Strategic Performance Weighted Marketing ‘Marketing Average Acquisition Growth 21% 31.4% 11% Foreign Exchange Growth 21% 29% 2.3% Total 14.9% 21.1% 17.0% + Year to date performance tracking to planned 5-7% organic growth for the full fiscal year
Slide 8: Second Quarter 2010 Revenue by Client Sector
MDC(K)PARTNERS Second Quarter 2010 Revenue by Client Sector Healthcare, 6% Auto, 3% Consumer Technology, 8% Products, 31% Financials, 12% Other, 12% Retail, 15% Communications, 14%
Slide 9: Summary of Segment Results — EBITDA
MDC(K)PARTNERS Summary of Segment Results — EBITDA (©58 mmiliens, except percenages) ‘Three Months Ended June 30, ‘Six Months Ended June 30, 210 2009 % Change 2010 2009 % Change EBITDA Strategic Marketing Services $ 158 $ 173 (8.6) % S$ 274 $ 299 (8.6) % margin 14.8% 19.7% 13.8% 17.3% Performance Ma
Slide 10: Free Cash Flow
Free Cash Flow MDC(K)PARTNERS ‘Three Months Ended June 30, Six Months Ended June 30, (USS in millions) 2010 2009 2010 2009 EBITDA $183 $18.5 271 $30.1 Net Income Artibutable to Noncontrolling Interests (2.0) (1.0) .9) a4) Capital Expenditures G0) (1.3) 67) @a) Cash Taxes 2) @.5) (08) (0.4) Cash Inte
Slide 11: Liquidity
10 MDC(K)PARTNERS Liquidity Available Liquidity at June 30, 2010 USS in milion) Commitment Under Facility $75.0 Drawn Letters of Credit 50 Funds Available Under Facility S$ 700 Total Cash 475 Liquidity $175
Slide 12: 2010 Financial Outlook
11 2010 Financial Outlook MDC(K)PARTNERS Implied ‘Year over Year* Chan; Adjusted Implied Pro Forma 2010 ‘Year over Year 2010 Guidance Estimate ‘Revenue $640 - $655 million $675 - $690 million EBITDA $86-$88 million $96 - $98 million Free Cash Flow S41 -$43 million $48 - $50 million + Change in Worki
Slide 13: Appendix
Appendix MDC(K)PARTNERS
Slide 14: Temporal Put Obligations and Impact on EBITDA
13 MDC(K)PARTNERS Temporal Put Obligations and Impact on EBITDA Estimated Put Impact at June 30, 2010 ‘Payment Consideration Tncremental USS in millon) Cash ‘Stock Total EBITDA in Period 2010 $6.0 $0.3 $6.3 $2.1 20 2.0 08 28 09 2012 78 06 84 16 2013 3.0 07 37 1s Thereafter 83 04 87 24 Total 27.1 $28
Slide 15: Balance Sheet: 2016 Senior Notes
14 MDC(K)PARTNERS Balance Sheet: 2016 Senior Notes Principal Amount $290 Million Date October 23, 2009/May 11. 2010 Maturity November 1, 2016 —7 Year Security Unsecured Coupon 11% Ratings Moody’s - Corporate: B1; Notes: B2 S&P: Corporate: BB-: Notes: B+
Slide 16: Balance Sheet: Revolving Credit Facility
15 Balance Sheet: Revolving Credit Facility Amount $75 Million Type Senior Secured. Maturity October 23, 2014-5 Year Facility Fee SObps per annum, Drawn Rate Prime + 300bps Covenants » Minimum EBITDA: $50 million » Fixed Charge Coverage Ratio: 1.25:1.0 + Senior Leverage Ratio: 2.0:1.0 MDC(K)PARTNERS
Slide 17: Summary Cash Flow Data
16 MDC(K)PARTNERS Summary Cash Flow Data Months Ended June 30, (USS in millions) 2010 2009 Cash flows provided by continuing operating activities (62.5) 17 Discontinued operations 0.3) 0.3) Cash flows used in continuing investing activities (863.2) ($5.8) Discontinued operations (0. 0.0 Effect of ex
Slide 18: Definition of Non-GAAP Measures
17 MDC(K)PARTNERS Definition of Non-GAAP Measures EBITDA: EBITDA is a non-GAAP measure, that represents operating profit plus depreciation and amortization, stock- based compensation, acquisition deal costs and deferred acquisition consideration adjustments. Organic Growth: Organic revenue growth is