Stagwell Inc. · NASDAQ:STGW
Stagwell — Q2 2021 Earnings Presentation
26 slides from Stagwell's earnings presentation, Aug 4, 2021
Slide 1: Second Quarter 2021 Earnings Conference Call
1 SECOND QUARTER 2021 EARNINGS CONFERENCE CALL AUGUST 4, 2021
Slide 2: Forward Looking Information & Other Information
FORWARD LOOKING INFORMATION & OTHER INFORMATION 2 This press release contains forward - looking statements . Statements in this press release that are not historical facts, including without limitation the information under the heading "Financial Outlook" and statements about the Company’s beliefs a
Slide 3: Forward Looking Information & Other Information
FORWARD LOOKING INFORMATION & OTHER INFORMATION 3 • reduction in client spending and changes in client advertising, marketing and corporate communications requirements ; • financial failure of the Company’s clients ; • the Company’s ability to retain and attract key employees ; • the Company’s abili
Slide 4: Second Quarter 2021 Financial Results
4 SECOND QUARTER 2021 FINANCIAL RESULTS
Slide 5: Second Quarter & Six Months Ended June 30, 2021 Financial Highlights
SECOND QUARTER & SIX MONTHS ENDED JUNE 30, 2021 FINANCIAL HIGHLIGHTS 5 GAAP Revenue ▪ Q2 2021 GAAP revenue of $209.6 million reported quarter on quarter growth of $47.2 million, or 29.1%, compared to Q2 2020 of $162.3 million ▪ Q2 2021 GAAP revenue reported sequential growth of $28.3 million, or 15.
Slide 6: Second Quarter 2021 Revenue Highlights
SECOND QUARTER 2021 REVENUE HIGHLIGHTS 6 Components of GAAP Revenue Q2 2021 GAAP revenue growth was $47.2 million, or 29.1%, and consisted of the following: ▪ Organic revenue growth of $38.7 million, or 23.8% ▪ Inorganic revenue contributed $ 7.5 million ▪ Foreign exchange effects on revenue was $1.
Slide 7: Six Months 2021 Revenue Highlights
SIX MONTHS 2021 REVENUE HIGHLIGHTS 7 Components of GAAP Revenue Six Months 2021 GAAP revenue growth was $43.9 million, or 12.7%, and consisted of the following: ▪ Organic revenue growth of $25.9 million, or 7.5% ▪ Inorganic revenue contributed $1 7.1 million ▪ Foreign exchange effects on revenue was
Slide 8: Summary of Operating Performance Comparative
8 SUMMARY OF OPERATING PERFORMANCE COMPARATIVE: 2021 - Q2 VS 2020 - Q2 & SIX MONTHS 2021 VS SIX MONTHS 2020 Note : S ee appendix – “DEFINITION OF NON - GAAP FINANCIAL MEASURES” (1) – Refer to non - GAAP reconciliation of Net Revenue on slide 21 Three Months Ended June 30, Six Months Ended June 30, (
Slide 9: GAAP Revenue & Net Revenue Summary
GAAP REVENUE & NET REVENUE SUMMARY 9 PRIVILEGED & CONFIDENTIAL | DRAFT (in thousands) Quarter on Quarter Change (2 nd Quarter) GAAP REVENUE Revenue % Change JUNE 30, 2020 162,330 Organic Revenue 38,712 23.8% Inorganic Revenue (1) 7,477 4.6% Foreign exchange effects 1,041 0.6% Total Change 47,228 29.
Slide 10: GAAP Revenue & Net Revenue Adjusted Basis
GAAP REVENUE & NET REVENUE ADJUSTED BASIS 10 PRIVILEGED & CONFIDENTIAL | DRAFT Note: S ee appendix – “DEFINITION OF NON - GAAP FINANCIAL MEASURES” (1) – Refer to non - GAAP reconciliation of Adjusted Results on slide 23 and 24 (in thousands) Quarter on Quarter Change Year to Date (2 nd Quarter) (2 n
Slide 11: GAAP Revenue Quarterly
GAAP REVENUE QUARTERLY 11 PRIVILEGED & CONFIDENTIAL | DRAFT 2020 2021 % Change Q221 vs Q220 YTD June (in thousands, except percentages) Q2 Q3 Q4 Q1 Q2 2020 2021 % change GAAP Revenue: Digital - Marketing $ 50,998 $ 54,227 $ 61,318 $ 66,631 $ 76,324 49.7% $101,546 $142,955 40.8% Digital - Content 23,
Slide 12: Adjusted EBITDA Quarterly
ADJUSTED EBITDA QUARTERLY 12 PRIVILEGED & CONFIDENTIAL | DRAFT Note: S ee appendix – “DEFINITION OF NON - GAAP FINANCIAL MEASURES” (1) – Refer to non - GAAP reconciliation of Net Revenue on slide 21 (2) – Refer to non - GAAP reconciliation of Adjusted EBITDA on slide 18, 19 and 20 (in thousands, exc
Slide 13: Adjusted EBITDA Six Months Ended
ADJUSTED EBITDA SIX MONTHS ENDED 13 Note: S ee appendix – “DEFINITION OF NON - GAAP FINANCIAL MEASURES” (1) – Refer to non - GAAP reconciliation of Net Revenue on slide 21 (2) – Refer to non - GAAP reconciliation of Adjusted EBITDA on slide 18, 19 and 20 (in thousands, except percentages) Six Months
Slide 14: Summary of Cash Flow Comparative
SUMMARY OF CASH FLOW COMPARATIVE: SIX MONTHS 2021 vs SIX MONTHS 2020 Operating Cash as a % of Adjusted EBITDA: Six Months 2021: 62.7% Six Months 2020: 111.7% Net cash used in investing activities included capital expenditures: Six Months 2021: $7,288 Six Months 2020: $5,317 14 Six Months Ended June
Slide 15: Available Liquidity
AVAILABLE LIQUIDITY (1) 15 PRIVILEGED & CONFIDENTIAL | DRAFT June 30, December 31, (in thousands) 2021 2020 Commitment Under JPM Credit Facility $ 325,000 $ 325,000 Drawn 187,698 201,636 Undrawn Letters of Credit 7,111 5,482 Undrawn Commitments Under JPM Credit Facility (1) 130,192 117,882 Total Cas
Slide 16: Debt Profile as of June 30, 2021
- - - 187,698 - - - 130,192 - 50,000 100,000 150,000 200,000 250,000 300,000 350,000 2021 2022 2023 2024 Borrowing Structure as of June 30, 2021 Standby Letters of Credit Maturity date of Revolver draws Available facility on Revolver DEBT PROFILE AS OF JUNE 30, 2021 BORROWING MATURITY SCHEDULE, COVE
Slide 17: Total Net Obligations
PRIVILEGED & CONFIDENTIAL | DRAFT (in thousands) June 30, 2021 Net Indebtedness (1) 114,745 Deferred Acquisition Consideration 16,283 Redeemable Non - Controlling Interest 2,626 Non - Redeemable Non - Controlling Interest 30,947 Investments (1,865) Total Other Obligations 47,991 Total Net Obligation
Slide 18: Appendix
APPENDIX 18
Slide 19: Adjusted EBITDA Quarterly Reconciliation by Segment
ADJUSTED EBITDA QUARTERLY RECONCILIATION BY SEGMENT 19 Note: S ee appendix – “DEFINITION OF NON - GAAP FINANCIAL MEASURES” For the six months ending June 30, 2020 2021 (in thousands) Q1 Q2 Q3 Q4 Full Year Q1 Q2 2020 2021 Digital – Marketing Operating income 2,413 5,027 10,429 9,939 27,810 3,740 10,7
Slide 20: Adjusted EBITDA Reconciliation by Segment (continued)
20 Note : S ee appendix – “DEFINITION OF NON - GAAP FINANCIAL MEASURES” For the six months ending June 30, 2020 2021 (in thousands) Q1 Q2 Q3 Q4 Full Year Q1 Q2 2020 2021 Communications, Public Affairs and Advocacy Operating income 8,911 6,314 19,437 35,742 70,404 6,426 8,450 15,225 14,876 Depreciati
Slide 21: Adjusted EBITDA Consolidated Reconciliation
ADJUSTED EBITDA CONSOLIDATED RECONCILIATION 21 Note : S ee appendix – “DEFINITION OF NON - GAAP FINANCIAL MEASURES” For the six months ending June 30, 2020 2021 (in thousands, except percentages) Q1 Q2 Q3 Q4 Full Year Q1 Q2 2020 2021 Net income 12,493 4,845 21,422 32,701 71,461 4,603 18,659 17,338 2
Slide 22: Reconciliations Inorganic GAAP Revenue and Inorganic Net Revenue
RECONCILIATIONS INORGANIC GAAP REVENUE AND INORGANIC NET REVENUE 2020 2021 (in thousands) Q1 Q2 Q3 Q4 FY Q1 Q2 YTD INORGANIC GAAP REVENUE GAAP revenue $ 184,543 $ 162,330 $ 228,097 $ 313,062 $ 888,032 $ 181,242 $ 209,560 $ 390,802 Organic revenue for the period (154,822) (140,923) (216,959) (299,785
Slide 23: Reconciliations Second Quarter - Adjusted GAAP Revenue and Adjusted Net Revenue
RECONCILIATIONS SECOND QUARTER - ADJUSTED GAAP REVENUE AND ADJUSTED NET REVENUE 23 Note : S ee appendix – “DEFINITION OF NON - GAAP FINANCIAL MEASURES” Communications, Public Affairs and Advocacy ("CPAA") Normalization Adjustment GAAP Revenue As Reported plus the difference between current period re
Slide 24: Reconciliations Six Months Ended - Adjusted GAAP Revenue and Adjusted Net Revenue
RECONCILIATIONS SIX MONTHS ENDED - ADJUSTED GAAP REVENUE AND ADJUSTED NET REVENUE 24 Note : S ee appendix – “DEFINITION OF NON - GAAP FINANCIAL MEASURES” Communications, Public Affairs and Advocacy ("CPAA") Normalization Adjustment GAAP Revenue As Reported plus the difference between current period
Slide 25: Other Miscellaneous Information
OTHER MISCELLANEOUS INFORMATION 2020 2021 (in thousands) Q1 Q2 Q3 Q4 FY Q1 Q2 YTD OTHER ITEMS, NET Acquisition - related expenses $ 657 $ 478 $ 461 $ 9,392 $ 10,988 $ 2,646 $ 1,297 $ 3,943 Other non - recurring items - - - - - 295 511 806 Other restructuring costs 470 865 94 1,490 2,919 - - - Total
Slide 26: Definition of Non-GAAP Financial Measures
DEFINITION OF NON - GAAP FINANCIAL MEASURES 26 In addition to its reported results, Stagwell Marketing Group has included in this supplemental management presentation certa in financial results that the Securities and Exchange Commission defines as "non - GAAP financial measures." Management believe