Slide 1: Management Presentation: Fourth Quarter and Year End 2011 Results
Management Presentation February 27, 2012 Fourth Quarter and Year End 2011 Results
Slide 2: Forward Looking Statements & Other Information
FORWARD LOOKING STATEMENTS & OTHER INFORMATION This presentation, including our “2012 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: Key Highlights
KEY HIGHLIGHTS Q4 2011 organic revenue growth of 6.7% and FY2011 organic growth of 17.0% • Q4 2011 revenue increased 20.5% to $254.3 million versus $211.0 million in Q4 2010 • Q4 2011 EBITDA decreased 33.5% to $25.5 million due to $13.5 million of growth investment spending versus $38.3 million in Q
Slide 4: Consolidated Revenue and Earnings
CONSOLIDATED REVENUE AND EARNINGS Note: Actuals may not foot due to rounding (US$ in millions, except percentages) 2011 2010 2011 2010 Revenue $ 254.3 $ 211.0 20.5 % $ 943.3 $ 689.1 36.9 % Operating Expenses Cost of services sold 181.5 140.7 29.0 % 674.5 473.4 42.5 % Office and general expenses 66.9
Slide 5: Summary of Segment Results - Revenue
SUMMARY OF SEGMENT RESULTS - REVENUE • Solid organic growth despite difficult comparisons • Organic revenue growth impacted by 4Q project delays • Acquisitions and investments bolstering financial performance (US$ in millions, except percentages) 2011 2010 2011 2010 Revenue Strategic Marketing Servi
Slide 6: Fourth Quarter 2011 Revenue Growth by Segment
FOURTH QUARTER 2011 REVENUE GROWTH BY SEGMENT Strategic Performance Weighted Marketing Marketing Average Services Services Total Organic Growth 7.9% 4.7% 6.7% Acquisition Growth 19.3% 5.5% 14.0% Foreign Exchange Growth -0.1% -0.2% -0.2% Total 27.1% 10.0% 20.5%
Slide 7: Year to Date 2011 Revenue Growth by Segment
YEAR TO DATE 2011 REVENUE GROWTH BY SEGMENT Strategic Performance Weighted Marketing Marketing Average Services Services Total Organic Growth 18.6% 14.3% 17.0% Acquisition Growth 19.3% 18.9% 19.2% Foreign Exchange Growth 0.6% 0.8% 0.7% Total 38.5% 34.0% 36.9%
Slide 8: Fourth Quarter Revenue by Client Sector
FOURTH QUARTER REVENUE BY CLIENT SECTOR Note: Actuals may not foot due to rounding Q4 2011 Q4 2010 Communications, Retail, 12% 14% Other, 13% Financials, 10% Consumer Products, 38% Technology, 4% Healthcare, 4% Auto, 4% Communications, Retail, 16% 15% Other, 12% Financials, 9% Healthcare, 5% Auto, 3
Slide 9: Full Year Revenue by Client Sector
FULL YEAR REVENUE BY CLIENT SECTOR Note: Actuals may not foot due to rounding 2011 2010 Communications, Retail, 14% 13% Other, 12% Financials, 10% Consumer Products, Technology, 8% 35% Healthcare, 4% Auto, 4% Communications, Retail, 17% 15% Other, 11% Financials, 10% Healthcare, 6% Auto, 3% Technolo
Slide 10: MDC Partners vs. Peers Trailing Month Organic Revenue
MDC Partners vs. Peers Trailing 12 Month Organic Revenue -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 MDC Partners Peers Outperformance Despite More Difficult Comparisons Note: Peers include Omnicom, Interpublic, WPP G
Slide 11: Summary of Segment Results - EBITDA
SUMMARY OF SEGMENT RESULTS - EBITDA Note: Actuals may not foot due to rounding (US$ in millions, except percentages) 2011 2010 2011 2010 EBITDA Strategic Marketing Services $ 1 9.1 $ 2 4.9 (23.2) % $ 73.4 $ 69.0 6.4 % margin 11.5% 19.1% 12.1% 15.7% Performance Marketing Services 1 0.7 1 3.4 (20.4) %
Slide 12: Free Cash Flow
FREE CASH FLOW Note: Actuals may not foot due to rounding (US$ in millions) 2011 2010 2011 2010 EBITDA $25.5 $38.3 $90.7 $88.4 Net Income Attibutable to Noncontrolling Interests (1.7) (5.6) (7.8) (10.1) Capital Expenditures (5.0) (4.2) (21.1) (11.1) Cash Taxes (0.1) (0.4) (0.2) (1.1) Cash Interest,
Slide 13: Liquidity
LIQUIDITY *Note: At December 31, 2011, after giving effect to the limitations under the 11% Senior Notes indenture, approximately $41.2 million was available under the bank credit facility. (US$ in millions) Commitment Under Facility $ 150.0 Drawn 38.0 Letters of Credit 5.8 Funds Available Under Fac
Slide 14: 2012 Financial Outlook
2012 FINANCIAL OUTLOOK Implied 2012 Year over Year* Guidance Change Revenue $1,000 - $1,025 million +6.0% to +8.7% EBITDA $102 - $107 million +12.4% to +18.0% Free Cash Flow $28 - $33 million +20.6% to +42.2% + Change in Working Capital and Other +$25 million Total Free Cash Flow $53 - $58 million -
Slide 15: Appendix
APPENDIX
Slide 16: Temporal Put Obligations and Impact on EBITDA
TEMPORAL PUT OBLIGATIONS AND IMPACT ON EBITDA Note: Excludes put rights of $88.1 million exercisable pursuant to termination of employment or death. Incremental (US$ in millions) Cash Stock Total EBITDA in Period 2012 3.5 0.7 4.2 3.3 2013 10.1 0.9 11.0 1.2 2014 4.2 1.2 5.4 1.3 2015 3.4 0.5 3.9 1.3 T
Slide 17: Balance Sheet: 2016 Senior Notes
BALANCE SHEET: 2016 SENIOR NOTES Principal Amount $345 Million Date October 23, 2009/May 11, 2010/April 19, 2011 Maturity November 1, 2016 Security Unsecured Coupon 11% Ratings Moody’s: Corporate: B1; Notes: B2 S&P: Corporate: B+; Notes: B+
Slide 18: Balance Sheet: Revolving Credit Facility
BALANCE SHEET: REVOLVING CREDIT FACILITY Amount $150 Million Type Senior Secured Maturity October 23, 2015 Facility Fee 50bps per annum Drawn Rate Prime + 225bps / LIBOR +250bps Covenants • Minimum EBITDA: $90 million • Fixed Charge Coverage Ratio: 1.25:1.0 • Senior Leverage Ratio: 2.0:1.0 • Total L
Slide 19: Summary of Cash Flow
SUMMARY OF CASH FLOW Note: Actuals may not foot due to rounding (US$ in millions) 2011 2010 Cash flows (used in) provided by continuing operating activities $5.5 $39.5 Discontinued operations (0.9) (2.2) Net cash (used in) provided by operating activies $4.5 $37.3 Cash flows used in continuing inves
Slide 20: Definition of Non-GAAP Measures
DEFINITION OF NON-GAAP MEASURES • EBITDA: EBITDA is a non-GAAP measure, that represents operating profit plus depreciation and amortization, stockbased compensation, acquisition deal costs, deferred acquisition consideration adjustments and profit distributions from affiliates. • Organic Growth: Org