Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — FY2007 Earnings Presentation
23 slides from Stagwell's earnings presentation, Feb 28, 2008
Slide 1: Fourth Quarter & Full Year 2007 Results
0) Management Presentation February 28, 2008 Fourth Quarter & Full Year 2007 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 “2008 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 n
Slide 3: Summary of 2007 Results
nN MDC(K)PARTNERS Summary of 2007 Results Revised (WSS in millions, except per share amounts) Guidance Revenue $515 - $525 Organic Growth 18% Adjusted MDC EBITDA $46.0 - $47.0 Adjusted Cash EPS $1.35 -$1.40 Adjusted Free Cash Flow $16.5 - $17.5 Shares Outstanding - Diluted 25.0 ‘Note: See definititi
Slide 4: Summary of Consolidated Results
MDC(K)PARTNERS Summary of Consolidated Results (©38in milion) ‘Three Months Ended December 31, ‘Twelve Months Ended December 31, 2007 2006 _% Change 2007 2006 _% Change Revenue S$ 1556 § 1218 277% $5473 § 4122 28% Operating Expenses Cost of services sold 985 665 481% 35192369 85% SG&A 387 334 15.9 %
Slide 5: Summary of Segment Results — Revenue
Summary of Segment Results — Revenue MDC(K)PARTNERS (05S in mits) ‘Three Months Ended December 31, ‘Twelve Months Ended December 31, 2007 2006 %6 Change 2007 2006 % Change Revenue Strategic Marketing Services $857 $ 701 223% $338 $ 215 30.0 % Customer Relationship Management 338 242 39.9% 113.0 849
Slide 6: Fourth Quarter 2007 Marketing Communications Revenue Growth by Segment
MDC(K)PARTNERS Fourth Quarter 2007 Marketing Communications Revenue Growth by Segment Strategic Customer Specialized Weighted Marketing Relationship Communication Average Services ‘Management Services Total Acquisition Growth 71% = 15% 44% Foreign Exchange Growth 1.9% = 11.8% 3.8% Consolidation of E
Slide 7: Full Year 2007 Marketing Communications Revenue Growth by Segment
MDC(K)PARTNERS Full Year 2007 Marketing Communications Revenue Growth by Segment Strategic Customer Specialized Weighted Marketing Relationship Communication Average Services Management Services Total Acquisition Growth 49% e 11% 3.1% Foreign Exchange Growth 0.9% e 49% 1.5% Consolidation of Equity A
Slide 8: Summary of Segment Results — EBITDA
MDC(K)PARTNERS Summary of Segment Results — EBITDA CSS.amstiow) ‘Three Months Ended December 31, ‘Twelve Months Ended December 31, 2007 2006 % Change 2007 2006 % Change EBITDA Strategic Marketing Services, S$ 14 $ 204 08) S S51 $ 529 42% Customer Relationship Management 31 27 161 % 99 10 419% Specia
Slide 9: Summary of Segment Results — MDC's Share of EBITDA
Summary of Segment Results — MDC’s Share of EBITD. MDC(K)PARTNERS Amounts and percentages may not fot di 0 rounding (Usain Three Months Ended December 31, ‘Twelve Months Ended December 31, 2007 2006 % Change 2007 2006 % Change MDC EBITDA Strategic Marketing Services S$ M48 $153 83 % $395 $ 308 (08)
Slide 10: Cash EPS Reconciliation
Cash EPS Reconcii MDC (K)PARTNERS (US$ in millions) ‘Twelve Months Ended December 31, 2007 2006 ‘Loss from Continuing Operations Gis.) (a) Depreciation, Amortization & Deffered Financing Cost Amortization 31.6 212 Stock Based Compensation 10.2 84 ‘Non-cash Unrealized Foreign Exchange 72 (0.6) Deferr
Slide 11: Free Cash Flow
10 MDC(K)PARTNERS Free Cash Flow ‘Twelve Months Ended December 31, (USS in millions) 2007 2006 Adjusted MDC EBITDA. $47.7 $32.8 Capital Expenditures, net (15.0) (22.4) Cash Taxes a2 (13) Cash Interest, net (13.2) (a) Capital Expenditures (as reported) 20.1 224 Reimbursable Capital Expenditures G1) (
Slide 12: Liquidity Profile
11 Liquidity Profile MDC(K)PARTNERS Available Liquidity at December 31, 2007 (USS in millions) Commitment Under Facility $185.0 Revolver 19 Term Loan A 60.0 Delayed Draw Term Loan B 515 113.4 Letters of Credit 7.0 Funds Available Under Facility S$ 64.6 Available Cash 69 Liquidity $715
Slide 13: Temporal Put Obligations and Impact on EBITDA
12 Temporal Put Obligations and Impact on EBITDA MDC(K)PARTNERS Estimated Put Impact at December 31, 2007 ‘Payment Consideration Tncremental (USS in millions) Cash Stock Total EBITDA in Period 2008 $118 $03 $12.1 $2.8 2009 21 09 3.0 06 2010 263 65 328 41 2011 2.0 ll 31 16 2012 - 2015 15.7 3.0 18.7 3
Slide 14: 2008 Financial Outlook
13 xX) MDC(K)PARTNERS 2008 Financial Outlook Revenue MDC's Share of EBITDA Free Cash Flow is Note: See appendix for definitions of non-GAAP measures.
Slide 15: Free Cash Flow Trend Demonstrates the Leveragability of our Model
14 MDC(K)PARTNERS Free Cash Flow Trend Demonstrates the Leveragability of our Model and Ability to enerate Free Cash Flow US$ in millions 2008E 2007A 2006A
Slide 16: Appendix
Appendix MDC(K)PARTNERS
Slide 17: Adjusted Revenue and Adjusted EBITDA Reconciliation
16 MDC(K)PARTNERS Three Months ended December 31, ‘Twelve Months ended December 31, USS miow) 2007 2006 2007 2006 Reported Revenue 1556 $ m8 Sa73 $ 4122 Consolidation of equity afitiates 39 s 198 Client termination payment z : 63) Adjusted Revenue 158 SATS 267 growth 28% Reported EBITDA 232 $ 233 os
Slide 18: Quarter Ended MDC Adjusted EBITDA Reconciliation
MDC(K)PARTNERS Quarter Ended December 31, 2007 MDC Adjusted EBITDA Reconciliation MDC PARTNERS INC. RECONCILIATION OF MDC EBITDA TO MDC ADJUSTED EBITDA (USS in 0008) For the Three Months Ended December 31, 2007 Strategic Customer Specialized Marketing Relationship Communication Services Management _
Slide 19: Quarter Ended December 31, 2006 MDC Adjusted EBITDA Reconciliation
MDC(K)PARTNERS Quarter Ended December 31, 2006 MDC Adjusted EBITDA Reconciliation ‘MDC PARTNERS INC. RECONCILIATION OF MDC EBITDA TO MDC ADJUSTED EBITDA (USS in 0005) For the Three Months Ended December 31, 2006 Strategic Customer Specialized ‘Marketing Relationship Communication Services Management
Slide 20: YTD MDC Adjusted EBITDA Reconciliation
19 YTD December 31, 2007 MDC Adjusted EBITDA Reconciliation MDC(K)PARTNERS MDC PARTNERS INC. ‘RECONCILIATION OF MDC EBITDA TO MDC ADJUSTED EBITDA (USS in 0005) For the Twelve Months Ended December 31, 2007 Strategic Customer Specialized Marketing Relationship Communication Services Management __Serv
Slide 21: YTD December 31, 2006 MDC Adjusted EBITDA Reconciliation
MDC(K)PARTNERS YTD December 31, 2006 MDC Adjusted EBITDA Reconciliation ‘MDC PARTNERS INC. RECONCILIATION OF MDC EBITDA TO MDC ADJUSTED EBITDA (USS in 0005) For the Twelve Months Ended December 31, 2006 Strategic Customer __ Specialized. Marketing Relationship Communication Services Management __Ser
Slide 22: Adjusted Earnings Per Share Reconciliation
Adjusted Earnings Per Share Reconciliation MDC PARTNERS INC. RECONCILIATION OF CASH EARNINGS TO ADJUSTED CASH EARNINGS PER SHARE (USS in 000s, except per share amounts) MDC(K)PARTNERS ‘Twelve Months Ended December 31, 2007 2006 Cash Earnings $31,389 $29,253 Costs related to CFO change 1,883 s Retent
Slide 23: Definition of Non-GAAP Measures
- EBITDA: EBITDA is a non-GAAP measure, that represents operating profit plus depreciation and amortization and stock-based compensation. A reconciliation of “EBITDA” to the US GAAP reported results of operations has been provided by the Company in the tables included in the earnings release issued