Stagwell Inc. · NASDAQ:STGW
Stagwell — MDC Partners — Q1 2010 Earnings Presentation
18 slides from Stagwell's earnings presentation, May 4, 2010
Slide 1: Management Presentation: First Quarter 2010 Results
Management Presentation May 5, 2010 First 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: First Quarter 2010 Highlights and Raised Guidance
MDC(K)PARTNERS + Raising fiscal 2010 guidance due to improving trends and completion of accretive acquisitions + Revenue increased to $136.2 million versus $126.7 million in Q1 2009, an increase of 7.5% + Organic revenue flat for Q1 2010; trending to solid growth for the year + MDC EBITDA decreased
Slide 4: Consolidated Revenue and Earnings
MDC(K)PARTNERS Consolidated Revenue and Earnings ‘Three Months Ended March 31, 2010 2009 % Change Revenue $ 1362 $ 1267 75 % Operating Expenses Cost of services sold 97.0 859 12.9 % Office and general expenses 34.6 312 ILI % Depreciation and amortization 58 16 23.2) % Operating Income (Loss) ay 21 (
Slide 5: Summary of Segment Results — Revenue
MDC(K)PARTNERS Summary of Segment Results — Revenue (USS in millions, except pacentazes) Three Months Ended March 31, 2010 2009 ‘Change Revenue Strategic Marketing Services S$ 915 $ 845 84 % Performance Marketing Services 447 42.3, 56 % + Both segments poised for strong revenue growth in fiscal 2010
Slide 6: Strategic Performance Weighted
MDC(K)PARTNERS Strategic Performance Weighted Marketing ‘Marketing Average Acquisition Growth 0.0% 14.8% 4.9% Foreign Exchange Growth 2.5% 3.3% 2.8% Total 8.2% 5.6% 1.5% + Third straight quarter of organic Strategic Marketing Services revenue growth + Positive momentum for organic Performance Market
Slide 7: First Quarter 2010 Revenue by Client Sector
MDC(K)PARTNERS First Quarter 2010 Revenue by Client Sector Healthcare, 5% Auto, 3% ‘Consumer Financials, 7% Products, 26% Technology, 9% Other, 11% Retail, 22% Communications, 17%
Slide 8: Summary of Segment Results — EBITDA
MDC(K)PARTNERS Summary of Segment Results — EBITDA (US$ in milion, except percentages) EBITDA Strategic Marketing Services margin Performance Marketing Services margin ‘Marketing Communications margin Corporate Expenses Three Months Ended March 31, 2010 2009 Change $ 1S $ 126 (85) % 12.0% 14.9% 07 1
Slide 9: Summary of Segment Results — MDC EBITDA
Summary of Segment Results — MDC’s S| (US$ in milion, except percentages) MDC(K)PARTNERS MDC EBITDA Strategic Marketing Services Performance Marketing Services Marketing Communications Corporate Amounts and percentages may not foot die 0 rounding $ ‘Three Months Ended March 31, 2010 10.6 06 113 Ga)
Slide 10: Free Cash Flow
MDC(K)PARTNERS Free Cash Flow Three Months Ended March 31, (USS in millions) 2010 2009 MDC EBITDA. $78 $12 Capital Expenditures (28) (0.8) Cash Taxes (0.6) on Cash Interest, net and other (63) 2.6) Amounts and percentages may not foot die 0 rounding
Slide 11: Liquidity
10 Liquidity Available Liquic (USS in millon) at March 31, 2010 MDC(K)PARTNERS Commitment Under Facility Drawn Letters of Credit Funds Available Under Facility Total Cash Liquidity 75.0 103 50 59.7 212 81.0
Slide 12: 2010 Financial Outlook
11 MDC(K)PARTNERS 2010 Financial Outlook Implied Implied 2010 ‘Year over Year 2010 ‘Year over Year* Cha ‘Revenue $573-$584 million $620 - $635 million $615 - $660 milton MDCEBITDA $69-$71 million $78 $80 millon $86--$88 mullion Free Cash Flow $35-$37.illion S41 - $43 milion $47 -$49 mailtica + Chang
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 March 31, 2010 ‘Payment Consideration Incremental (CSS inmitions Cash Stock Total EBITDA in Period 2010 $6.1 $0.1 $62 $1.6 2011 1.6 04 20 07 2012 25 o4 29 16 2013 30 07 37 0s Thereafter 39 o4 43 0s Total $171 $2.
Slide 15: Balance Sheet: 2016 Senior Notes
14 MDC(K)PARTNERS Balance Sheet: 2016 Senior Notes Principal Amount $225 Million Date October 23, 2009 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 Three Months Ended March 31, (WSS in millions) 2010 2009 Cash flows provided by continning operating activities 112) Discontinued operations Effect of exchange rate changes on cash and cash equivalents $0.1 $0.4 Amounts and percentages may not foot die 0 roun
Slide 18: Definition of Non-GAAP Measures
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. MDC EBITDA: MDC EBITDA is a non-GAAP measure