Slide 1: Management Presentation Fourth Quarter 2017 Results
Management Presentation Fourth Quarter 2017 Results February 22, 2018
Slide 2: Forward Looking Statements & Other Information
FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation, including our “2018 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 not historical fact
Slide 3: Summary
SUMMARY Year of significant progress operationally and financially – delivered on key targets with industry-leading performance Best-in-class organic revenue growth with broad-based gains across agencies, in key verticals such as CPG, and continued double-digit growth internationally Increases
Slide 4: Fourth Quarter 2017 Financial Highlights
FOURTH QUARTER 2017 FINANCIAL HIGHLIGHTS Revenue increased 3.2% to $402.7 million from $390.4 million Organic revenue growth of 3.3%, including a 50 basis points benefit from increased billable pass-through costs Net income attributable to MDC Partners common shareholders increased to $220.7 m
Slide 5: Full Year Financial Highlights
FULL YEAR FINANCIAL HIGHLIGHTS Revenue increased 9.2% to $1.51 billion from $1.39 billion Organic revenue growth of 7.0%, including a 160 basis points benefit from increased billable pass-through costs Net income attributable to MDC Partners common shareholders increased to $235.5 million from
Slide 6: Consolidated Revenue and Earnings
CONSOLIDATED REVENUE AND EARNINGS (US$ in millions, except percentages) Three Months Ended December 31, Twelve Months Ended December 31, 2017 2016 (1) % Change 2017 (1) 2016 (1) % Change Revenue $ 402.7 $ 390.4 3.2 % $ 1,513.8 $ 1,385.8 9.2 % Operating expenses Cost of services sold 268.7 260.2 3.3
Slide 7: Revenue Summary
REVENUE SUMMARY (US$ in millions, except percentages) Three Months Ended Twelve Months Ended Revenue $ % Change Revenue $ % Change December 31, 2016 $390.4 $1,385.8 Organic Revenue Growth (Decline) 12.8 3.3% 96.4 7.0% Non-GAAP Acquisitions (Dispositions), net (1) (6.1) (1.6%) 30.4 2.2% Foreign Excha
Slide 8: Revenue by Geography and Segment
REVENUE BY GEOGRAPHY AND SEGMENT (US$ in millions, except percentages) Three Months Ended December 31, 2017 Twelve Months Ended December 31, 2017 Total Total Organic Revenue Total Total Organic Revenue Revenue Growth Growth (Decline) Revenue Growth Growth (Decline) United States $303.5 (0.2%) 1.3% $
Slide 9: Revenue by Client Industry
REVENUE BY CLIENT INDUSTRY Q4 2017 Mix Year-over-Year Growth by Category Q4 2017 2017 Above 10% Communications, Communications, Financials, Consumer Financials, Food & Products Beverage, Consumer Products 0% to 10% Healthcare, Food & Healthcare Beverage Below 0% Transportation & Automotive, Travel,
Slide 10: Adjusted EBITDA
ADJUSTED EBITDA (US$ in millions, except percentages) Three Months Ended December 31, Twelve Months Ended December 31, 2017 2016 % Change 2017 2016 % Change Advertising and Communications Group $ 74.2 $ 64.6 14.9 % $ 235.9 $ 213.5 10.5 % Global Integrated Agencies 44.6 35.2 26.5 % 118.5 104.8 13.1 %
Slide 11: Summary of Cash Flow
SUMMARY OF CASH FLOW (US$ in millions) Twelve Months Ended December 31, 2017 2016 Net cash provided by (used in) operating activities $115.3 ($1.2) Net cash used in investing activities ($20.9) ($25.2) Net cash used in provided by financing activities ($75.4) ($9.3) Effect of exchange rate changes o
Slide 12: 2018 Financial Outlook
2018 FINANCIAL OUTLOOK 2018 Guidance Organic Revenue approximately 4% growth Adjusted EBITDA Margin approximately 20 basis points increase Note: The Company has excluded a quantitative reconciliation with respect to the Company’s 2018 guidance under the “unreasonable efforts” exception in item 10(e)
Slide 13: Appendix
APPENDIX 12
Slide 14: Revenue Trending Schedule
REVENUE TRENDING SCHEDULE (US$ in thousands, except percentages) 2015 2016 2017 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Revenue United States $252,018 $271,375 $270,512 $291,147 $1,085,051 $252,199 $272,992 $274,506 $304,016 $1,103,712 $274,682 $304,463 $289,701 $303,517 $1,172,364 Canada 29,82
Slide 15: Adjusted EBITDA Trending Schedule
ADJUSTED EBITDA TRENDING SCHEDULE (US$ in thousands, except percentages) 2015 2016 2017 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY ADVERTISING AND COMMUNICATIONS GROUP Revenue $302,222 $336,606 $328,415 $359,013 $1,326,256 $309,042 $337,047 $349,254 $390,442 $1,385,785 $344,700 $390,532 $375,800 $
Slide 16: Acquisition Revenue Detail
ACQUISITION REVENUE DETAIL Reconciliation of Non-GAAP Acquisitions (Dispositions), net to Revenue in the Statement of Operations (US$ in millions) 2015 2016 2017 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Revenue from acquisitions (dispositions), net (1) $ 45.8 $ 6.6 $ 2.8 $ 17.1 $ 24.7 $ 51.1 $ 18.6 $ 25.0 $
Slide 17: Reconciliations
RECONCILIATIONS (US$ in millions) 2015 2016 2017 Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Non-GAAP acquisitions (dispositions), net GAAP revenue from prior year acquisitions * n/a n/a n/a n/a n/a $ 6,556 $ 2,817 $ 17,083 $ 24,657 $ 51,113 $ 18,552 $ 24,983 $ - $ - $ 43,535 Foreign exchange impac
Slide 18: Available Liquidity
AVAILABLE LIQUIDITY1 (US$ in millions) December 31, 2017 December 31, 2016 Commitment Under Facility $325.0 $325.0 Drawn $ 0.0 54.4 Undrawn Letters of Credit 5.1 4.4 Undrawn Commitments Under Facility $319.9 $266.2 Total Cash & Cash Equivalents 46.2 27.9 Liquidity $366.1 $294.1 1 Subject to availabl
Slide 19: Current Credit Picture
CURRENT CREDIT PICTURE $325 million Credit Facility Covenants (1) Current Debt Maturity Profile (5) (US$ in millions) Twelve Months Ended December 31, December 31, 2017 2016 Covenants I. Total Senior Leverage Ratio (0.0) 0.3 Maximum per covenant 2.0 2.0 II. Total Leverage Ratio 4.3 5.0 Maximum per c
Slide 20: Temporal Put Obligations and Impact on Adjusted EBITDA
TEMPORAL PUT OBLIGATIONS AND IMPACT ON ADJUSTED EBITDA Estimated Put Impact at December 31, 2017 Payment Consideration Incremental (US$ in millions) Cash Stock Total Income in Period 2018 $4.1 $0.0 $4.1 $2.4 2019 2.8 0.1 2.9 0.0 2020 5.0 0.1 5.1 1.5 2021 1.9 0.0 1.9 0.0 Thereafter 1.8 0.0 1.8 0.5 To
Slide 21: Reconciliation of Adjusted Non-GAAP Results: Impact of Tax Items
RECONCILIATION OF ADJUSTED NON-GAAP RESULTS: IMPACT OF TAX ITEMS (US$ in millions) Net Impact of Valuation As Tax Cuts and Allowance Adjusted Reported Jobs Act (1) Reversals (2) Results Three Months Ended December 31, 2017 Income (loss) before income taxes and equity in earnings of non-consolidated
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 contact details
MDC Partners Innovation Center 745 Fifth Avenue, Floor 19 New York, NY 10151 646-429-1800 www.mdc-partners.com